Suppose that low-skilled workers employed in clearing woodland
Suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equipped with a shovel, a machete, and a chainsaw. Clearing one acre brings in $1500 in revenue. Each worker’s equipment costs the worker’s employer $275 per month to rent and each worker toils 40 hours per week for 4 weeks each month.
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Instructions:In parta, enter your answer as a whole number. In partsb-e, round your answers to 2 decimal places.
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a. What is the marginal revenue product of hiring one low-skilled worker to clear woodland for one month? $.
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b. How much revenue per hour does each worker bring in? $.
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c. If the minimum wage were $9.28, would the revenue per hour in part b exceed the minimum wage? Yes or no.
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If so, by how much per hour? $ per hour.
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d. Consider the employer’s total costs. These include the equipment costs as well as a normal profit of $50 per acre. If the firm pays workers the minimum wage of $9.28 per hour, what will the firm’s economic profit or loss be per acre?
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The firm’s profit or loss per acre will be $.
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e. At what value would the minimum wage have to be set so that the firm would make zero economic profit from employing an additional low-skilled worker to clear woodland?
Answers
Status NEW
Posted 14 May 2017 03:05 PM
My Price 7.00
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Attachments
file 1494775153-1523999_1_636303218000419539_Marginal-Revenue-and-minimum-wage.xlsx preview (344 words )
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