. Carolyn owns a soda factory and hires workers in a competitive labor market to bottle the soda. Her company's weekly output of bottled soda varies with the number of workers hired, as shown in the following table. a. If each case sells for $10 more than the cost of materials and wages are $1000 per week, how many workers will be hired? b. Suppose a bottlers union now sets weekly wages at $1,500 and all the workers belong to the union. How many workers will be hired instead? 0. If the price per case rises so that each one sells for $15, will Carolyn hire more workers under union conditions? . How would you explain to a skeptical bank manager why the socially optimal number of bank robberies is not zero? . Over the last several decades which has increased more in the United States, poverty or income inequality. Explain why. . Give one example of something that would increase the labor supply (shift right) and give one example of something that would decrease the labor demand (shift left). . The Mayor of Bloomeld wants to reduce carbon emissions by 50%. Currently there are two large factories in Bloomfield that each pollute 6 units of carbon. The Mayor wants to reduce the total from 12 units to 6 units. Each factory will get three pollution credits that they can use or sell to the other firm. The table below shows the costs for each firm to reduce poHuon. Bink Corp. Wabash Inc. Rcduccd units Total Cost Marginal Reduced units Total Cost Marginal of Cost of Cost poHuon pounon 5 5 33 33 00-th 1 13 8 2 71 38 25 12 3 116 45 43 18 4 I72 56 71 28 5 239 67 115 44 6 319 80 three pollution credits that they can use or sell to the other firm. The table below shows the costs for each rm to reduce pollution. Bink Corp. Wabash lnc. Rcduccd units Total Cost Marginal Reduced units Total Cost Marginal of Cost of Cost pollution pollution l 5 5 l 33 33 2 13 8 2 71 38 3 25 12 3 116 45 4 43 18 4 172 56 5 71 28 5 239 67 6 l 15 44 6 319 80 a. Both of these companies have the option to buy or sell pollution credits. Explain why Bink is more likely to be the seller and Wabash the buyer? b. If the price for credits is $33, how many credits will be sold? (3. In this case, does allowing the sale of credits make pollution reduction more efcient than having each company reduce by 3 units? Why or why not? 6. Explain why the freerider problem is likely to happen when a group must decide to provide a public good. 7. The town of Smallsville is considering building a museum. The city will have to borrow money to build the museum and will own $1000 per year in interest. Each citizen's marginal benet is listed in the table below. Citizen Hargina'l benefit from museum (Slyear) Anita 340 Brandon 290 Carlene 240 Dallas 190 Eloise 140 a. Assuming each citizen voted based on their own private interests, would they vote to increase taxes by $200 per person per year to build the museum? b. If instead a private company built the museum and charged people a yearly fee to attend the museum, would any company offer to build it? Explain. 0. Comparing the cost to the social marginal benet, would it be more efcient to build the museum or not