2. (25') Suppose that UNC Student Store now produces basketballs by themselves, using labor and leather. As a xed input, the store will purchase a machine at a cost of $500. Each worker will get $200 per day as the payment. For each basketball, the cost of leather is $10. Assume that the store is in a market with perfect competition. The following table shows how the store's output of basketballs changes as it hires more workers. Number 0': Number Of Marginal Total Variable Marginal COSt Workers Basketballs Product of Cost WC) of a basketball Produced Labor (a) (8') Fill in the table: what are the MPLs, TVCs, and MCs? (Hint: MPL is defined as the extra products given an additional worker) (b) (3') Is MPL increasing or decreasing as the number of workers increases? Explain your answer. (c) (4') Notice that the store is operating in a perfectly competitive market, the market price of a basketball is given by the demand curve QD = 6000 100F' and the supply curve Q; = 100P. Then, how many workers will the store hire to maximize the profit? What is the value of the prot/loss? (d) (3') Consumers may argue that \"the UNC store is selling their basketballs as a monopolist, instead of being in a perfectly competitive market, because their basketballs have a unique logo\". What's the difference between a perfectly competitive market and a monopolist market? How can producers maximize their prot in each market? Explain respectively. The outbreak of Covid-19 stopped the production of UNC basketballs. In fact, the whole country has been severely affected by the pandemic. According to the FRED database, we are experiencing a higher aggregate price level and lower real GDP. (c) (3') Illustrate this circumstance by shifting only one curve (AD/SEAS) in the AS-AD model. Draw in the following diagram. Aggregate Price Level Real GDP (f) (4') In response to these shocks and to promote the real GDP, what kind of monetary policy should the Fed employ? Explain and plot a new diagram based on the one in (e)