TO INCREASE THE EMPLOYMENT AMONG WORKERS WITH DISABILITY, THE GOVERNMENT INTRODUCES EMPLOYMENT SUBSIDY. SPECIFICALLY, THE GOVERNMENT WILL PAY FIRMS $3/hour FOR EACH WORKER FROM THE TARGET GROUP EMPLOYED BY THE FIRM. PRIOR TO THE SUBSIDY, THE LABOUR SUPPLY OF SUCH WORKERS IS GIVEN BY Ls = 15 + 5w and labour demand is given by Ld = 110 - 10w. AFTER THE SUBSIDY WAS INTRODUCED, THE LABOUR DEMAND FOR SUCH WORKERS IS Ld' = 140 - 10w.

A - What are the level of employment and equilibrium wage rate before and after the subsidy goes into effect?

B - WHAT SHARE OF THE SUBSIDY DO THE WORKERS WITH DISABILITY ACTUALLY RECEIVE?

C - EXPLAIN WHAT DETERMINES THE PROPORTION OF THE SUBSIDY RECEIVED BY THE WORKERS IN THE LABOUR MARKET EQUILIBRIUM AFTER THE SUBSIDY IS INTRODUCED

D - COMPUTE THE ELASTICITY OF THE LABOUR DEMAND ASSOCIATED WITH THE WAGE INCREASE FROM $7 TO $8 AFTER THE SUBSIDY IS INTRODUCED.