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(B.1) (T/F/U) In the neoclassical model of labour with two periods, if agents have log preferences income and substitution effects will cancel each other and labour supply will not change over the business cycle. [10 marks] (B2) (T/ F/ U) In the neoclassical model of labour with rigid wages, in response to a neg ative TF P shock, if workers and rms could agree to a lower wage that could lead to a Pareto improvement. [10 marks] (B3) (T / F / U) In the efciency wages model workers are paid a wage premium to compen- sate for the chance of them being red if getting caught shirking. [10 marks]