QUESTION 4 Which one of the following statements is incorrect? a) Equilibrium in a perfectly competitive labour market occurs where the demand for labour is equal to the supply of labour. b) Equilibrium in a perfectly competitive labour market occurs where the quantity of labour demanded is equal to the quantity of labour supplied c) Equilibrium in a perfectly competitive labour market is the result of the interaction between the demand for labour and the supply of labour. d) The individual supply of labour bends backwards when the income effect becomes stronger than the substitution effect. QUESTION 5 Marks) Read the article below and answer the question that follows: 'Twelve years ago, 300,000 children in China were poisoned after drinking infant milk formula that contained melamine, a chemical used in plastic. Six babies were killed by the toxic substance, which was used by 22 companies to artificially boost the protein levels that showed up in nutrition tests." Source: https://www.scmp.com/business/companies/article/3051808/foreign- brands-stilldominateparents-do-not-trust-chinas-home Ten years after China's infant milk tragedy, parents still will not trust their babies to local formula. As a result, many Chinese parents buy baby formula that is produced outside China. Which of the following accurately describes the likely effect of this on baby formula prices? a) An increase in the price of baby formula produced in China and a decrease in the price of baby formula produced outside China. b) A decrease in the price of baby formula produced in China and an increase in the price of baby formula produced outside China. c) A decrease in the price of both baby formula produced in China and baby formula produced outside China. d) An increase in the price of both baby formula produced in China and baby formula produced outside China