1. Suppose the farm labor market is characterized by the following labor supply and demand equations: LS =a tawta,M LD =by + b, w+ b,I Where: LS and LD are the quantities of farm labor supplied and demanded, respectively (thousands of worker-days) w is the farm wage (dollars) M is immigration (thousands of worker-days) T is a technology-shift parameter equal to 1 if new robotic harvesters are available and zero otherwise. a. Please derive a general equation for the equilibrium wage as a function of T and M b. You hire an econometrician to estimate the parameters in this model, and this is what she comes up with: ao = 0 al = 0.15 a = 1 bo = 125 b1=-0.25 by= -10 Do these parameter estimates seem reasonable to you? Please explain. c. Using these parameters, please calculate the equilibrium labor quantity and wage in this farm labor market if M = 100 and there is no technological change (that is, T = 0). (Hint: a spreadsheet like EXCEL would come in quite handy here.) d. Use your model to simulate the absolute and percentage impact on the equilibrium labor quantity and wage of each of the following: i. Rising education in rural Mexico causes a 10% decrease in farm labor immigration ii. Farmers adopt robotic harvesters iii. Both (i) and (ii) e. Please use a graph to illustrate and explain why your model gave you the results it did. f. Based on your simulation in d(i), what is your best numerical estimate of the elasticity of the farm wage with respect to immigration? The elasticity of the equilibrium farm employment with respect to immigration? What do these elasticities tell us