diagram to show the effect of a minimum wage on the wage rate, employment, and unemployment if the market is monopsonistic because searching for a new job is costly in time and money. [10 points]8. Suppose the hourly wage is $10 and the price of each unit of capital is $25. The price of outputis constant at $50 per unit. The production function is f(E,K) = E½K ½so that the marginal product of labor is MPE= (½)(K/E)½.If the current capital stock is fixed at 1,600 units, how much labor should the firm employ in the short run? How much profit will the firm earn?[5 points]9. You estimate 2 regressions, where ln L is the natural log of the number of workers in millions and ln W is the natural log of the hourly wage:[15 points]Labor demand ln L = 3.45 – 0.11 ln WR2= 0.65 (1.41) (0.03)Labor supply ln L = 3.09 + 0.09 ln WR2= 0.58(1.28) (0.04) a.Which coefficients are statistically significant and which are not?b.If the minimum wage is $7.25, how many workers will firms want to hire, how many people will want to work, and what is the unemployment rate in this labor market? c.If the minimum wage is $11.00, how many workers will firms want to hire, how many people will want to work, and what is the unemployment rate in this labor market? d.If the average worker in this labor market works 30 hours per week and 50 weeks per year, what are the total earnings of all minimum wage workers at $7.25 and $11.00? Give your answers in billions of dollars. e.Compare the average annual earnings for all people in this labor market and the unemployment rate when the minimum wage is $7.25 and $11. Given these numbers, should the minimum wage be raised to $11?f.Draw a supply-demand diagram, labeling all relevant values of L and W. Show all your calculations.