2. An industry has perfect competitive market in both labor market and output market. Assume there are many identical small firms in the industry. Why is industry labor demand curve steeper than the sum of labor demand curve of each firm in the industry? Explain with proper figures.

3. The demand for big data engineer increased shapely in recent years, and the training of these engineers needs a few years. List the two assumptions of Cobweb Model, and use the model to explain that the entry level salary of big data engineer is likely to be unstable across different years.

4. Assume there are two countries, Maryland and Fairyland, where workers were mobile, and entry and exit of workers to the labor market was free. The devastating floods destroyed a large amount of capital stock in Maryland, while there was no life lost. Two countries still figured out arrangements to maintain free trade, and united output market.

1)Assume labor and capital were compliment in Maryland. What will happen in the labor market in Maryland in the short run? Explain with proper figure.

2) Assume a Maryland firm that luckily survived in the flood without any damage was in a perfect competitive labor market, and a perfect competitive output market. How would changes in the output market and the labor market in Maryland influence its output level decision, labor demand decision, and input combination choice in the short run? Explain with proper figures (hints: explain changes in the output market, optimal output level of the firm, the labour demand of the firm, and the input combination choice).

3) Immigration between two countries started after the floods. What will happen to the labor markets in Maryland and Fairyland in the short run if workers in two countries are perfect substitutes?