Impact of Wage Subsidy on Labour Supply Decision - Economic Analysis

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Wage Subsidy and Labour Supply

Prompt

Draw an economics-themed illustration showcasing the effect of a wage subsidy on the labour supply decision. The image should consist of three comparative graphs: (1) a graph representing an individual who has no unearned income and earns a wage of 'w' when they work; (2) a graph depicting the introduction of a welfare program with benefits 'B' and a 100% clawback rate; and (3) a graph detailing the introduction of a wage subsidy for low-wage workers. Make sure each of the graphs are clearly labelled with axes representing income and leisure, a budget constraint line, and an indifference curve to illustrate the individual's preferences. The potential change in labour supply should be clearly indicated.

Created on 12/17/2023 using DALL·E 3 modelReport

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Wage Subsidy and Labour Supply

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