1. Suppose that labor is the only input used by a perfectly competitive rm. The rm's production function is as follows: Days of Labor Units of Output {1 days 0 units 1 3' 2 13 3 19 4 25 5 28 6 29 I" 29 a) Calculate the marginal product for each additional worker. b) Each unit of output sells for $10. Calculate the value of the marginal product of each worker. 0) Compute the demand schedule showing the number of workers hired for all wages from zero to $100 a day. (1) Graph the rm's demand curve. 6) What happens to this demand curve if the price of output rises from $ 10 to $ 12 per unit? 2. A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a bowl of soup for $1.50 per meal. Her weekly food budget is $60. a) Draw the budget constraint showing the trade-off between dining hall meals and bowls of soup. Assuming that she spends equal amounts on both goods, draw an indifference curve showing the optimum choice. Label the optimum as point A. b) Suppose the price of a bowl of soup now rises to $2. Using your diagram from part (a), show the consequences of this change in price. Assume that our student now spends only 30 percent of her income on dining hall meals. Label the new optimum as point B. c) What happened to the quantity of bowls of soup consumed as a result of this price change? What does this result say about the income and substitution effects? Explain. d) Use points A and B to draw a demand curve for bowls of soup. What is this type of good called