The graph below shows the budget constraint between income and leisure for an individual as well as a government program that guarantees a certain amount in income but then reduces this amount by $0.50 for each $1.00 earned. Step 1. Move the government support line (dotted line) to reflect the data given in the table. Step 2. Move the vertical intercept of the budget line to reflect the data given in the table. Note: On both steps, assume that the table gives information up to the maximum available time for work/leisure for this individual. Table 1: The Labor-Leisure Tradeoff with Assistance Reduced by $0.50 for Each $1.00 Earned Amount Worked (hours) Total Earnings Government Support Total Income $18, 000 $18, 000 500 $4, 000 $16, 000 $20, 000 Provide your answer below: 30000 (0, 25000) 20000 10000- -Government-Support-(900,$12000)- Income ($)

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The theory of absolute advantage was given by Adam Smith in the year 1776.