Suppose an economy has the following characteristics. There are 64 unskilled workers and 64 skilled workers. Each worker has a labor supply function of H(w) = 4, in other words they do not have a reservation wage and will work 4 hours regardless. There are 16 equal sized firms that are competitive in all markets (all firms employ the same amount of each type of labor and of capital and no firm has any market power over wages, rental rate of capital or the price of their output). All firms have a production function that takes unskilled workers, skilled work- ers, and capital as inputs (f(lu, ls, k)). The rental rate of capital is $1 and the price of the firm's output is $1