Wages represent a significant cost component to business and labour is an essential production input of nearly every good and service produced. Explain the following:

A) The efficiency wage hypothesis and why firms may choose to pay workers above the market clearing rate? (4 marks)

B) What is another reason why the top executives for a firm may be paid very high wages? (3 marks)

C) Why is it that in high income professions (such as doctors), the labour supply curve may be backwards bending. (3 marks)

D) How can trade unions influence wages across different types of labour markets? (5 marks)

E) There is a debate on the effect of a minimum wage on the firm and market. Critics argue that it can cause unemployment and lead to a higher poverty rate. Supporters argue that it not only helps to reduce poverty among the low-paid workers, but also has little or no adverse effects on employment or even increase employment. Please revisit the demand and supply model and analyse its effect across different types of labour markets. (5 marks)