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The effort of a firms workers depends on their real wage according to the following schedule.Real Wage Effort (E)16 1017 1318 1819 2220 2521 26.The

The effort of a firms workers depends on their real wage according to the following schedule.Real Wage Effort (E)16 1017 1318 1819 2220 2521 26.The marginal product of labor is MPN = E(400 4N)/30.

(a) What is the efficiency wage?

(b) How many workers will the firm hire?

(c) Suppose an adverse productivity shock reduces the marginal product of labor to MPN = E(360 4N)/30.

How would your answers to parts (a) and (b) change?

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