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a. The Figure below represents labour force and employment in Australia before the bushfire devastation. Assume Eo is the equilibrium demand and supply for labour

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a. The Figure below represents labour force and employment in Australia before the bushfire devastation. Assume Eo is the equilibrium demand and supply for labour before the bushfires. Also, assume that in order to attract people to seek employment after the bushfires, the government of Australia increased wages from AUD20 to AUD25 per hour. Answer the questions that follow. 30 25 20 Wage per hour (AUD) 10 DL 10 15 20 Labour Force (Millions) Note: E. = Equilibrium demand and supply for labour ; DL = Demand for labour; S, = Labour supply (i) What was the employed population in Australia before the bushfires? 1 Mark ANSWER i): (ii) Did the increase of the wage cause a shortage or surplus of labour? Show your calculations in order to provide your answer. 2 Marks

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