What will be each workers hourly wage

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Reference no: EM131392394

A firm hires two workers to assemble bicycles. The firm values each assembly at $12. Charlie’s marginal cost of allocating effort to the production process is 4N, where N is the number of bicycles assembled per hour. Donna’s marginal cost is 6N.

(a) If the firm pays piece rates, what will be each worker’s hourly wage?

(b) Suppose the firm pays a time rate of $15 per hour and fires any worker who does not assemble at least 1.5 bicycles per hour. How many bicycles will each worker assemble in an 8 hour day?

Reference no: EM131392394

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