In an interview in the March 15, 2004 edition of BusinessWeek, Alan Blinder, economic advisor to Presidential candidate John Kerry, argues: A number of economists, including myself, are coming to the conclusion that for one reason or another, the market system is not generating enough jobs from a social perspective. ... That leads me to start thinking that maybe we should distort ... the market mechanism in favor of more hiring. ... One idea is a jobs credit. [Firms would] get a tax credit for hiring. Consider the following example of how such a credit could work. Suppose that the post-credit marginal product of labor, MPN, is given by MPN = [100+CR] - N, where N is labor (in worker-hours), and CR is the tax credit (in real terms) that firms receive for each worker-hour they employ. c) (10 pts.) Suppose that the price of output, P, is $2.00 per unit, and that the nominal wage, W, is $40 per worker-hour. What is the real wage, w? How much labor would firms want to hire at this real wage when CR = 0? How much labor would firms hire at this real wage when CR = 10? 4 d) (12 pts.) Using graphs, show how increasing the credit affects equilibrium labor hours/employment and the equilibrium real wage. You should assume that the Keynesian (efficiency wage) model of labor markets applies. (You can also assume that the credit is temporary, and that it is paid for by an increase in lump-sum taxes.)