1. Consider a company operating in a perfectly competitive market. It sells its output for $20 a unit and pays its workers $160 daily. The following table shows the marginal productivity of each worker. Fill the empty columns.

Number of workers	Marginal productivity (number of units per day)	Marginal Revenue of Product of labour ($ per day)	Marginal Resource Cost (MRC)	Hire / Do not hire	Reason to hire or not hiring
0
1	16
2	13
3	10
4	9
5	7
6	4

2. What do you mean by externalities? Give examples of each for negative and positive externalities.

3. Why can a homeowner make a better argument for compensation for noise pollution if a local airport was built after he moved in than if it was already there when he moved in? Would it matter whether he knew it was going to be built?

4. How would each of the following affect the demand or supply of workers? In each case, determine the impact on equilibrium wage and quantity.

a. Immigration increases dramatically.

b. Demand for Canadian manufactured goods declines.

c. New computerized technology increases the productivity of Canadian workers.

d. Canadian firms increase job amenities for workers.