Using the one-period search model where workers have a reservation wage and the option to decline job offers, explain how an increase in the amount of unemployment benefits that each unemployed person gets can potentially increase the number of long-term unemployed people. In particular, explain

a) how it would affect the reservation wage

b) how it would affect the number of offers that exceed the reservation wage

c) how it would affect the flows from unemployment to employment.

d) Using your explanation from parts a-c, give one example why increasing unemployment benefits would be costly for the economy.