(Problem 1, Page 437) A firm identifies the following relationship between thereal wage it pays and the effort exerted by its workers:Real Wage81012141618The marginal product of labor for this firm isMPN = E(100-N)/15Effort71015171920where E is the effort level and N is the number of workers employed. If thefirm can pay only one of the six wage levels shown, which should it choose?How many workers will it employ?There are 200 workers in the town where the firm is located, all willing towork at a real wage of 8. Does this fact change your answer to the first part ofthis question? If so, how?

The huge real wage differentials that may still be found between rich and developing countries are…

Problem 1, Page 437) A firm identifies the following relationship between th real wage it pays and the effort exerted by its workers: Real Wage 8 10 12 14 16 18 The marginal product of labor for this firm is MPN = E(100-N)/15 Effort 7 10 15 17 19 20 where E is the effort level and N is the number of workers employed. If th firm can pay only one of the six wage levels shown, which should it choos How many workers will it employ? There are 200 workers in the town where the firm is located, all willing to work at a real wage of 8. Does this fact change your answer to the first pa this question? If so, how?