1. Suppose you own a drive-in theater and need workers for the summer. Last year you hired workers at a wage equal to their marginal product. Doing so again this year would mean paying $3. However, last year many of your workers quit before the summer season was over, and you found it difcult to replace them. This year, you would like to only hire workers that plan to work for the entire summer. Describe a simple payment scheme that might help attract only workers expecting to work all summer. 2. Consider the same setup as l, but suppose now that there is a minimum wage of $8. How does this affect your planned payment scheme? 3. Now suppose the drivein is in Sunnydale, and both humans and demons are applying for the job. Assume further that both groups actually have identical probabilities of working all summer. You decide to try to use a personal interview to determine which applicants yn'll stay all summer. Based on a model of statistical discrimination why might this result in either more humans being hired or demons being paid a lower wage? Questions 4 to 6 refer to a situation in which one of the demons hires the law rm of Wolfram Er Hart to sue you for discrimination. The lawyer performs the following Oaxaca decomposition: _ _ _ _. _ , I-a _ -. II _ '._ WH WD[bHII'XH XD'II]+'|'GH GDJI+LbH bDJIXD] :1. ssuruingl-I refers to human and Dto demon, and Wis the wage, what does I represent? What are the a's and it's, and how did the lawyer obtain them? 5. How is the first bracketed term interpreted? Why might it be an underestimate? Er. How is the second bracketed term interpreted? Why might it be an underestimate