What is the critical difference in productivity

Reference no: EM131161056

Suppose college graduates earn $25 an hour and high school graduates earn $15 an hour. Suppose too that the marginal product of college graduates at Johnson Tools is five hammers per hour, while the marginal product of high school graduates is four hammers per hour (regardless of the number of each type of worker employed). What is the least-cost production method for producing 100 hammers in an eight-hour day? What if the marginal product of high school graduates were instead two hammers per hour? What is the critical difference in productivity (in percentage terms) at which the type of worker hired changes?

Reference no: EM131161056

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