Imagine you have just started your own business, and you now need to hire your very first worker. You cannot monitor everything your worker will do, nor can you measure their effort or all the outcomes of their work accurately. However, you are a business owner who knows the labour discipline model, as shown in the figure below:

1.Would you want to hire a worker with asteepbest response function, or aflatbest response function? Explain your answer. (2 points)

2.To maximise your profit, should you pay a wage above $24 to obtain an effort per hour from your worker of more than 50%, if your worker's best response function was identical to the one in the above figure? Explain your answer. (2 points)

3.What would happen to the best response function (and hence the equilibrium wage and effort per hour) if the unemployment rate decreased from 10% to 5%? Explain your answer. (3 points)

4.Imagine that due to a global pandemic, your worker needed to work for your business from their own home rather than your office. Explain using the labour discipline model what might happen, and what you might do to try and counteract the impact of working from home. (3 points)