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I’m trying to study for my Economics course and I need some help to understand this question.ECO 305 Problem set 3undefinedSuppose the president decides that pre schools are subsidized in order to help parents return to work as the pandemic fades. Analyze, using the labor supply model, what this is expected to do to the labor supply of single mothers. Assume single mothers cannot both work and tend to their kids but have to choose one, and that no children are left unattended. Also assume no family is available to help with child care.What happens to leisure?
What happens to consumption?
What happens to the utility of the affected parent?
Use the consumption over time model, income and substitution effects, and a graph to carefully analyze what happens to consumption today, consumption in the future, utility and savings if the interest rate is lowered, and before it was lowered the consumer was a lender (i.e. C1M1)
Requirements: 1-2 pages   |   .doc file


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