[Fall 2020 FINAL] Job Search: Consider an economy with three types of jobs. The table below shows the jobs, the frequency with which vacancies open up on a yearly basis, and the lifetime income associated with each job. Assume that once you secure a job, you work there till the end of your life. Searching for a job costs $D per year and generates at most one job offer. There is a 20 percent chance of not receiving an offer in a year. Job Type Frequency Income A 30 percent $60,000 B 20 percent $100,000 C 30 percent $80,000 As a function of D, specify the optimal job search strategy (the optimal asking wage, R) if the worker maximizes her expected income net of search costs. [Fall 2020 FINAL] Efficiency Wages: Consider a simple efficiency wage model. A worker's utility as a function of wages w and effort e is given by u(we). The worker's effort level can take on only 2 levels, ec 0, e) . The firm's monitoring activity is such that with probability y, the worker will be monitored. In this case, if the worker is shirking, she is fired. If the worker is not monitored (happens with probability 1-y), the worker is not fired regardless of effort choice. Given that the firm offers wage w, the worker's expected utility if she chooses not to shirk is given by Euwe =Inw-e . If she chooses to shirk, her expected utility is Euw,0 = 1-yIn w+y[ulm b)+1-u)In w-e] , where b is unemployment benefits, W is the market wage and u is the unemployment level. Denote by w the minimum