9. Suppose workers in a particular firm join a company health program, cut down on smoking and drinking, and get more exercise. Further suppose this significantly increases their productivity. If the firm behaves as a profit maximizer it will respond by:
  1. hiring fewer workers since it takes fewer workers to produce the same amount of output.
  2. hiring more workers since the additional output produced by each more productive worker has the same effect as lowering production costs.
  3. reduce the wage to make up for the change in productivity.
  4. keep employment the same and enjoy greater profits.
  5. it all depends on the supply elasticity of labor's marginal demand.

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