Answer the next two questions using the information in the table below.

# of Workers
Wage Rate
Marginal Revenue Product
1 (first)
2 (second)
3 (third)
4 (fourth)
5 (fifth)

If the firm maximizes profits, it should hire the:

first worker, but not the second.
second worker, but not the third.
third worker, but not the fourth.
fourth worker, but not the fifth.
fifth worker.

The firm was hiring workers using the above table, and had found the solution that maximized profits. Now assume that a minimum wage is introduced at a level of $1.75. The firm would:

hire fewer workers but pay more.
hire more workers and pay more.
hire fewer workers and pay less..
hire more workers and pay less.
make no changes.

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