1) The demand for labour in Occupation A is LD = 20 - W, where LD = number of workers demanded for that occupation, in thousands. The supply of labour for Occupation A is LA = -1.25 + 0.5W. For Occupation B, the demand for labour is similar, but the supply of labour is LB = -0.5 + 0.6W, which is indicative of a more pleasant environment associated with that occupation in comparison with Occupation A. a. Plot the labour market for both occupations. b. What is the equilibrium wage rate and quantity of labour for occupation A and B? c. What is the compensating wage differential between the two occupations? Q2) Theodore is considering a 1-year training program, which charges $20,000 in tuition, to learn how to install airport-screening equipment. If he enrolls in the program, his opportunity cost in forgone income is the $100000 per year he can now earn. After completing the program, he is promised a job for 5 years, with a yearly salary of $130,000. (After 5 years, the equipment is expected to be obsolete, but Theodore plans to retire at that time anyway.) Assume Theodore's personal discount rate is 5 percent. Should Theodore enroll in the program? Why? (Show your calculations.)