Consider the following model of the labour market:Labour supply:  =  ×  + Labour demand:  =  − The endogenous variables area)  and b)  and the equilibrium wage, c)  and the equilibrium wage, d) the equilibrium quantity of labor, , and wage, e)  and the equilibrium quantity of labor, 

The diagram of the labour model depicted below compares the labour market outcomes when there are no trade unions, i.e., where wages are bargained between firms and individual workers (point X) with two cases, points Z and Y, where wages are bargained between firms and trade unions.  a) Describe the labor market outcome at point Z and compare it with the labor market equilibrium at point X. [5 points]b) Explain the economic factors that could lead the labor market to be at point Z instead of at point X. [5 points]c) Describe the labor market outcome at point Y and compare it with the labor market equilibrium at point X. [5 points]d) Explain the economic factors that could lead the labor market to be at point Y instead of at point X. [5 points]

With reference to the labour market model, which of the following statements is correct?Select one correct answerGroup of answer choicesThe unemployed can get a job by offering to work for a wage lower than the equilibrium wageFirms aim to set as high a price as possible.Once they have the job, employees are better off not exerting any effort in their work.In order to motivate employees to work hard and well, firms set the wage sufficiently high so that workers receive an employment rent, in other words, there is a nonzero cost of job loss.

Let us consider the following model with increasing returns to scale, where each firm has limited market power, product differentiation is limited and the market share is equal to s<1 (defragmentation effect).In country H, in a given sector, in autarchy, there are n firms that produce the final good employing only labor, whose total supply is equal to L. The wage of workers is normalized to 1. The total cost function to produce q units of the final good is TC = f + c∙q.i) Derive the total labor demand in country H and write the full employment condition in the labor market.

According to the labor supply and demand model, as the real wage rises,ResponsesA workers are willing to provide less labor, and employers are willing to provide more jobs.workers are willing to provide less labor, and employers are willing to provide more jobs.B workers are willing to provide less labor, and employers are willing to provide fewer jobs.workers are willing to provide less labor, and employers are willing to provide fewer jobs.C workers are willing to provide more labor, and employers are willing to provide fewer jobs.workers are willing to provide more labor, and employers are willing to provide fewer jobs.D workers are willing to provide more labor, and employers are willing to provide more jobs.

a) Describe the labor market outcome at point Z and compare it with the labor market equilibrium at point X. [5 points]b) Explain the economic factors that could lead the labor market to be at point Z instead of at point X. [5 points]c) Describe the labor market outcome at point Y and compare it with the labor market equilibrium at point X. [5 points]