Analysis: Suppose that congress votes on major deregulation of key US industries

a) Discuss intuitively how the decrease in regulations affects production and Labor demand, providing economic reasoning.

b) Continue with a). Use a diagram(s) to illustrate the impact of a fall in regulations (i.e. deregulation) on production and output & on the labor market (and hence the equilibrium real wage and the equilibrium full-employment). Label all axes and all curves using notation.

(for example use N for Labor and Y for output)