Problem 1, 3, 4. 1. Suppose that the market wage is $10 per hour but that Charlie will work harder if his employer pays him a higher wage. The relationship between Charlie's wage and MRP is given in Table 11P.1. What is the efficient wage for Charlie? Table 11P.1 Charlie's Wage Rate and Marginal Revenue Productivity Wage ($/hour) MRP, ($/hour) 8 12.00 10 16.00 12 19.00 14 20.50 16 22.00 18 23.00 20 24.00 22 24.50 24 25.00 26 25.75 a. The MRP of labor is given by the following equation: MRP = 20 L, where L = number of workers. If the market wage is $5 per hour, how many workers will the employer want to hire? b. The employer now finds that employees will work harder if they are paid a higher wage. If the wage rate paid to the workers is at least $6 per hour, the higher productivity of labor is represented by the new marginal product of labor curve: MRP1 = 22 - L. How many workers would the employer want to hire at $6 per hour? c. Use economic theory to explain the change in employment levels associated with paying $6 instead of $5. 4. Suppose that the wage rate paid at a particular firm is W= 5 + 0.5 T, where T = the number of years that the worker has been employed at the firm. The marginal revenue product, which is measured in dollars per hour, is MRP =6 + 3 T. Assume that the wage is high enough to attract workers from alternative jobs. a. Ignoring the discounting of future values to the present, graph the wages and MRP_ over a period of 12 years. b. Would this pay scheme be more attractive to first, a worker who is looking for stable employment with the same firm for the next 12 years or, second, a worker who plans to move to another geographic area in six years, which would necessitate leaving their job? Explain