Reference no: EM13976340
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 $1300 in revenue. Each worker’s equipment costs the worker’s employer $235 per month to rent and each worker toils 40 hours per week for 4 weeks each month.
a. What is the marginal revenue product of hiring one low-skilled worker to clear woodland for one month? $.
b. How much revenue per hour does each worker bring in? $.
c. If the minimum wage were $8.03, would the revenue per hour in part b exceed the minimum wage? (Click to select)Yes No.
If so, by how much per hour? $ per hour.
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 $8.03 per hour, what will the firm’s economic profit or loss be per acre?
The firm’s (Click to select)profitloss per acre will be $.
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?
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: 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 $1300 in revenue. What is the marginal revenue product of hirin..
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