The local Shreveport-Bossier Paralegal Union has observed that the Bureau of Lab

Question

The local Shreveport-Bossier Paralegal Union has observed that the Bureau of Labor Statistics projects that employment of paralegals over the next decade will rise considerably faster than the employment of lawyers, and suggests that all paralegals now push for wages of $25.39 per hour. Feeling like their future is safe, most paralegals now reduce the stress in their lives by only writing on average two briefs per hour. If the other values remain the same (attorney wage and writing speed, need for 24 briefs per hour), would the company save money in the writing of the 24 legal briefs by hiring the four new paralegals and firing some attorneys?

Select one:

a. Yes. The higher productivity of the attorneys matters less than the fact that they are more expensive to hire. The cheaper paralegals should be hired, even if their productivity is slightly lower, since the total cost is lower.

b. No. The cost of the four paralegals is less than the cost of two attorneys, so paralegals produce a single legal brief more expensively than attorneys.

c. Yes. The four paralegals can produce a single legal brief at a cheaper cost than a single attorney, so hiring them leads to a lower total cost.

d. No. The decreased productivity and higher wage results in the marginal product per dollar of paralegals being below the marginal product per dollar of lawyers. The cost of using only lawyers is now cheaper than using four paralegals and three lawyers.

Explanation / Answer

d. No. The decreased productivity and higher wage results in the marginal product per dollar of paralegals being below the marginal product per dollar of lawyers. The cost of using only lawyers is now cheaper than using four paralegals and three lawyers.

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