Recently, some college alumni started a moving service for students living on ca
ID: 1108538 • Letter: R
Question
Recently, some college alumni started a moving service for students living on campus. They have 3 employees and are debating hiring 1 more. The hourly wage for an employee is $20 per hour. An average moving job takes 3 hours. The company currently does 5 moving jobs per week, but with 1 more employee, the company could manage 8 jobs per week. The company charges $80 for a moving job. Instructions: Round your answers to the nearest whole number a. The new employee's marginal product of labor is moving jobs. b. The value of that marginal product is $ c. The moving service Click to select hire another worker li Next >Explanation / Answer
a. MPL= 8-5/4-3 = 3
b. VMPL = w*MPL = 20*3 = 60
c. Since firm charges $80, hence, should not hire new employee
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