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You are the manager of Lift Up, a local non-profit that provides advising and tutoring to low-income children to help them get into college. Lift Up uses two types of workers: highly-trained professional staff and high school students. The trained staff work quickly, and can work on 15 cases per hour. Because they are well-trained, these workers earn $30 per hour. High school students are less-skilled and require more supervision. They work on only 5 cases per hour, but are paid less, earning only earn $10 hour.
(a) Currently, you have 20 professional staff and 40 high school students. Based on the data above, are you minimizing costs? How do you know this? If so, explain why this combination is the best for Lift Up. If Lift Up is not minimizing costs, what changes should you make to the current staff allocation to lower costs?
(b) To increase employment of school age children, the government offers a $5 subsidy for each high school student hired. Assume that Lift Up already meets the demand of all students needing advice on college, so that there is no demand for additional services. How does this subsidy change your answer to part (a)?
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