What is the least coast production method for producing

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Suppose college graduates earn $25 an hour and high school graduates earn $15 an hour. Suppose too that the marginal product of college graduates an 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 coast 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?

[HINT: Find out whether the per hammer production cost is cheaper if only college graduates are employed or if only high school graduates are employed. The last part of this question is a challenge question. You need to think in terms of the MRTS between college and high school graduates.]

Reference no: EM131089646

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