Consider the dual labour market model based on Ghatak and Jiang (2002) with the following modification: the entrepreneurial technology requires one entrepreneur and two workers. Suppose that w_ = 15, = 0.1, = 150, = 135, = 0.1, = 100. Suppose that 40 % of the population have asset holdings = 400 and the remaining 60% of the population a=250.

1. a)Show that = 40 is an equilibrium.
2. Show that (15,40) is not an equilibrium.
3. Draw a graph that depicts the labour demand and supply curves as well as the labour market equilibrium