Please use the following information to answer the next questions. Suppose the production function is Y=100(N-0.005N^2). And the marginal product of labor is MPN=100-N The aggregate quantity of labor supplied is NS=50+w-Tr, where w is the real wage rate and Tr is the lump-sum transfer that household received from the government.

1: Which of the following statement correctly explains the effect of decreasing transfer payments on labor supply

A: Decreases household wealth and increases labor supply due to the income effect

B: Decreases household wealth and increases labor supply due to the substitution effect

C: Increases household wealth and decreases labor supply due to the income effect

D: Increases household wealth and decreases labor supply due to the substitution effect

E: None of the above

2: Suppose the transfer is 0. the equilibrium real wage is

A: less than or equal to 20

B: more than 20, but less than or equal to 25

C: more than 25, but less than or equal to 30

D: more than 30, but less than or equal to 35

E: more than 35

3: Suppose the transfer is 0, The full-employment level of employment is:

A: less than or equal to 60

B: more than 60, but less than or equal to 65

C: more than 65, but less than or equal to 70

D: more than 70, but less than or equal to 75

E: more than 75

4: Suppose the transfer is 10, the equilibrium real wage is

A: less than or equal to 20

B: more than 20, but less than or equal to 25

C: more than 25, but less than or equal to 30

D: more than 30, but less than or equal to 35

E: more than 35

5: Suppose the transfer is 10, the full-employment level of output is

A: less than or equal to 3,500

B: more than 3,500, but less than or equal to 4,000

C: more than 4,000, but less than or equal to 4,500

D: more than 4,500, but less than or equal to 5,000

E: more than 5,000

6: Suppose the transfer is 10. In addition, the government implements a real minimum wage of 20. The new employment level is

A: less than or equal to 50

B: more than 50, but less than or equal to 60

C: more than 60, but less than or equal to 70

D: more than 70, but less than or equal to 80

E: more than 80

7: Suppose the transfer is 10. In addition, the government implements a real minimum wage of 40. The new employment level is

A: less than or equal to 50

B: more than 50, but less than or equal to 60

C: more than 60, but less than or equal to 70

D: more than 70, but less than or equal to 80

E: more than 80