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Consider an economy with many firms, say a large number J, and where each of them must decide whether to be active, that is to produce. Each firm is endowed with the same production function y = z min {k, An}, z, A > 0. where & and n are the firm's capital stock and its labor input respectively. 1. What is a firm's labor hiring decision for a given wage rate w and a given capital stock k? Suppose now that each firm is endowed with a different capital stock and denote by kj the capital stock of firm j, je {1, ..., J}. 2. Given your answer to 1., explain which firms decide to be active. 3. What is then the aggregate labor demand function? 4. Suppose that the aggregate labor supply function is NS ( w ) = =h, for h > 0 and w being a large positive number. What is the equilibrium wage rate? How does it change with the effective aggregate capital stock K, that is the total capital stock used in production by active firms? Discuss briefly