Question 5 (Supply and demand model of a labour market) The demand and supply of labour in the gold mining industry are given by the following equations. NP = 400 - 2wu N' = 240 + 2w where N" is the number of workers demanded by employers in the industry, N' is the supply of workers to the industry and w is the real wage in dollars per day. (a) Find the equilibrium values for employment and the real wage. Draw a graph to illustrate the equilibrium outcome. (b) Suppose workers form a union and through collective bargaining achieve a wage of $60 per day. Find the number of workers who are employed and the number who are willing to work for $60 per day, but are unemployed. (c) Harder: What effect does the formation of the union have on wage and profit shares in the gold mining industry? (Hint: Recall that the labour demand curve is also the marginal product curve for the gold mining industry)