The diagram below represents the labour market conditions in a highly specialised industry.
Which of the following combinations of statements is correct if the supply of labour shifts from SL1S_{L1}SL1 to SL2S_{L2}SL2, resulting in a change in the labour market equilibrium from E1 E_1\,E1 to E2E_2E2?
Statement 1: Transfer earnings are unchanged; Statement 2: Labour will be supplied whatever the wage rate
Statement 1: Transfer earnings are unchanged; Statement 2: There is infinite wage elasticity of supply of labour
Statement 1: Economic rent is unchanged; Statement 2: Labour will be supplied whatever the wage rate
Statement 1: Economic rent is unchanged; Statement 2: There is infinite wage elasticity of supply of labour
