3. (35) Minimum Wage. We want to understand the effect of introducing a minimum wage on unemploy- ment, employment and wages. As it turns out, the effect depends on our theory of the labor market a. (5) First, consider the labor market theory of Shapiro and Stiglitz (1984). Write down the Labor Demand (LD) equation and the Ne-Shirking (NS) equation witheut a minimum wage. b. (5) In the (N*,uw*) space, draw the solutions to the LD and NS equations. In the graph, indicate the equilibrium employment, the equilibrium wage and the equilibrium unemployment. 5 1y source was downloaded by 1000082326282 from CourseHero.com on 03-12-2024 14:12:51 GMT 05:00 wnuny coursehero. com/file/615588404mid 1-S20pd/ . (5) lustrate graphically what happens to employment, unemployment and wages when the government introduces a minimum wage w > w*. [That is, a minimu wage higher than the equilibrium wage in the laissez-faire economy]. Explain your findings. d. (5) Now consider the search-theoretic model of unemployment and wage inequality of Burdett and Mortensen (1998). Write down the equilibrium wage offer distribution Fi(w) without a minimum wage. 6 ady source was downloaded by 1000872326282 from CourseHero.com on 03-12-2024 14:12:51 GMT -05:00 v, course hero. com/file/6 155880 1-S20pd e. (8) Now write the equilibrium wage offer distribution F(w)given that the government introduced a minimum wage we such that we > R and w,