2. (4 points) Consider two firms, Firm A and B. Suppose a job only has two attributes: wages (W) and fringe benefits (F) (think of a "unit" of fringe benefits encompassing various non-wage benefits such as life/disability/health insurance, education assistance, flexible work arrangements, dependent care assistance, etc.). Assume that Firm A earns a predetermined sales revenue of $500 when it employs one worker and it costs the firm $50 per unit of fringe benefits. Therefore, the firm's total cost can be expressed as TC = W + 50F. Firm B's predetermined sales revenue is $300 when employing one worker and the firm's cost of providing one unit of fringe benefits is $20. Firm B's total cost can be expressed as TC=W+20F. For simplicity, assume that each firm hires only one worker. a) (1 point) Draw the isoprofit schedule for both Firm A and B when both firms earn zero profits. Make sure to draw the two isoprofit schedules on the same graph (place W on the vertical axis and F on the horizontal axis). Graphically illustrate the employer's offer curve. b) (3 points) Suppose there are three workers, David, Kate, and John with different preferences over wages and fringe benefits. Assume that their utility functions can be expressed as follows: David: U(W.F)=WF Kate: U(W.F) = min{W,20F) John: U(W,F) = W+30F For each worker, do the following: 1) Solve for the optimal (W*, F"). 2) Explain which firm the worker would prefer to work at. 3) Graphically illustrate how the optimum is found