1. You are to assume that the wage offer distribution facing searchers is uniform, with an upper bound of 20 and a lower bound 0 (ie all wage offers between 0 and 20 are equally likely). Assume that the discount factor,  is equal to 0.8 and that the probability of receiving an offer in any period of unemployment is  = 0.5. Finally, assume that the utility in any period spent unemployed, u0, is 0. Now suppose that in each period an employed person has a 1% chance of losing their job, meaning =0.01. 
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3. (a) What wage offers are accepted? In other words, what is the reservation wage? 
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5. (b) What is the unemployment rate in the long run? 
6. (c) What is the average accepted wage