Assume a competitive product market and a competitive labor market. Suppose that employees in this market are able to purchase health insurance through their employer at a pre-income tax discount, while insurance purchased on the market remains taxable. What might we expect to happen to the demand for "fringe benefits" in the form of health insurance? How will firms respond to the demand of fringe benefits? What will happen to employees' monetary salaries? What will happen to real salaries?

Now suppose that government mandates the same fringe benefit (health insurance) to be purchased and provided by employers. What will happen to the monetary wages of employees? What will happen to the real wages? What will happen to the quantity of workers employed in that market?

Include a graph to depict the situation.