Leisure Times, Inc., employs skilled workers and capital to install hot tubs. The capital includes the tools and equipment workersuse to construct and install the tubs. The installation services are sold in a competitive market for $1,000 per hot tub. LeisureTimes is able to hire workers for $3,500 per month, including the cost of wages, fringe benefits, and employment taxes. Theincrease in the number of hot tubs installed as additional workers are hired is indicated in the following table.Complete the third and fourth columns of the table by computing the marginal product as the number of employed workers changes and themarginal revenue product for each unit of labor when the competitive price for a hot tub is $1,000.Number of WorkersEmployed12341056789Number of Hot TubsInstalled512At this new wage, the firm should hire18232730323334MarginalProductIf Leisure Times is able to hire workers for $3,500 per month, it should hireSuppose the wages of skilled workers rise to $4,500 per month.Marginal Revenue Product(Hot Tub Installation Price= $1,000)workers to maximize its profit.$$$$$$$Suppose that the price of hot tub installation services increases to $1,400 per hot tub.Marginal Revenue Product(Hot Tub Installation Price= $1,400)workers to maximize its profit.Now complete the final column of the previous table by comput the marginal revenue product of labor at this new price.At this new installation price of $1,400 and a wage rate of $4,500 per worker per month, Leisure Times shouldemployworkers.$00000⁰

Leisure Times, Inc., employs skilled workers and capital to install hot tubs. The capital includes the tools and equipment workers use to construct and install the tubs. The installation services are sold in a competitive market for $1,000 per hot tub. Leisure Times is able to hire workers for $3,500 per month, including the cost of wages, fringe benefits, and employment taxes. The increase in the number of hot tubs installed as additional workers are hired is indicated in the following table. Complete the third and fourth columns of the table by computing the marginal product as the number of employed workers changes and the marginal revenue product for each unit of labor when the competitive price for a hot tub is $1,000. Number of Workers Employed Number of Hot Tubs Installed Marginal Droduct Marginal Revenue Product (Hot Tub Installation Price $1.000) Marginal Revenue Product (Hot Tub Installation Price $1,400)

Leisure Times, Inc., employs skilled workers and capital to install hot tubs. The capital includes the tools and equipment workers use to construct and install the tubs. The installation services are sold in a competitive market for $1,000 per hot tub. Leisure Times is able to hire workers for $3,500 per month, including the cost of wages, fringe benefits, and employment taxes. The increase in the number of hot tubs installed as additional workers are hired is indicated in the following table. Complete the third and fourth columns of the table by computing the marginal product as the number of employed workers changes and the marginal revenue product for each unit of labor when the competitive price for a hot tub is $1,000. Number of Workers Employed Number of Hot Tubs Installed Marginal Droduct Marginal Revenue Product (Hot Tub Installation Price $1.000) Marginal Revenue Product (Hot Tub Installation Price $1,400)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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