Illustrate what is the maximum weekly wage

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Reference no: EM1359148

How do firms and individuals determine if it's worth it to (a) invest in capital improvements, (b) hire additional workers, or (c) decide where to work? Briefly explain.

2. (Shifts of Resource Demand) A local pizzeria hires college students to make pizza, wait on tables, take phone orders, and deliver pizzas. For each situation described, determine whether the demand for student employees by the restaurant would increase, decrease, or remain unchanged. Briefly explain each answer.

a. The demand for pizza increases.

b. Another pizzeria opens up next door.

c. An increase in the minimum wage raises the cost of hiring student employees.

d. The restaurant buys a computer system for taking phone orders.

3. (Selling Output as a Price Taker) If a competitive firm hires another full-time worker, total output increases from 100 units to 110 units per week. Suppose the market price of output is $25 per unit. What is the maximum weekly wage at which the firm would hire that additional worker?

Reference no: EM1359148

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