7. Consider a competitive labor market where the market demand and the market supply are given initially by QD = 1000 – 50P and Q = 50P, respectively. The quantity of labor is measured in number of people (assume that people are perfectly divisible) and prices are measured in RMB. (a) Suppose there is a recession and the demand for labor is reduced by 200 workers at every price level. Find the number of people who are unem- ployed as a result. (b) Suppose the government wants to help the newly unemployed by paying them 50% of the pre-recession equilibrium wage. What would be the total cost of this program to the government? How does the program affect the post-recession aggregate surplus? Is there a deadweight loss associated with this program? (c) Suppose the government wants to reduce unemployment, so it is consid- ering using the money that would have been spent on the unemployment benefit program on a wage subsidy program instead. In particular, the government will reimburse the employers t% of the wages paid. What is the value of t that will make the wage subsidy program have the same cost as the unemployment benefit program? How many additional workers will be hired as a result?