Please show your work. To earn marks you will need to provide a justification for every statement that you make. I recommend that you include in your solution all of the (nicely labelled) graphs needed to answer this question.

Assume that Good A is a normal good, whereas Good B is an inferior good. In addition to being sold directly to consumers, Good B is an input used in the production of Good A.Suppose an improvement in technology causes labour to become more productive. Use the model of the Labour Market to determine the impact this will have on the "real wage"=income. What impact will this change in income have on the price and quantity of Good A?