Ethan is currently employed as a financial consultant at a bank, earning an hourly wage of R120 and exerting an effort level of 0.6. If he lost his job today, Ethan would be able to claim R50 per hour as his net UIF benefits. This point is an equilibrium of the labour-discipline model.

(a) Calculate how much extra effort Ethan would be willing to exert if he were offered an extra R1 in wages. Give your answer correct to 3 decimal places. [2]

(b) Draw the labour-discipline model for the scenario above, making sure to label all important points and values in your diagram. [4]

(c) Imagine that Divanis employer offered her the following deal: If you exert an effort level of 0.8, I will pay you a wage of R240 per hour. Would Divani accept this offer? Explain your answer briefly. [3] (d) Instead of offering Divani a deal to increase her effort levels, assume that Divanis employer decides to increase supervision presence on the bank floor so that they can better monitor their employees. Show, using the labour-discipline model, how this would affect Divanis equilibrium wages and effort levels