Macroeconomics
Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 19, Problem 16APA
To determine

The reason for higher payment to the managers than the salespeople.

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A restaurant hires cooks and waiters. Cooks earn $10 an hour; waiters earn $5 an hour. The manager, who wants to maximize the number of meals served given a fixed payroll of $45 per hour, expects the following from cooks and waiters:   Number of employees Total number of meals served Cooks Waiters 1 200 120 2 380 230 3 540 310 4 660 360 5 740 390   Given the information in the table, and given the fixed payroll, the maximum number of meals that can be served is____
Read the "Clear it Up: Do Profit Maximizing Employers Exploit Labor" Do Profit Maximizing Employers Exploit Labor? (Source: OER)  If you look back at the labor dynamics of supply and demand, you will see that only the firm pays the last worker it hires what they’re worth to the firm. Every other worker brings in more revenue than the firm pays him or her. This has sometimes led to the claim that employers exploit workers because they do not pay workers what they are worth. Let’s think about this claim. The first worker is worth $x to the firm, and the second worker is worth $y, but why are they worth that much? It is because of the capital and technology with which they work. The difference between workers’ worth and their compensation goes to pay for the capital, technology, without which the workers wouldn’t have a job. The difference also goes to the employer’s profit, without which the firm would close and workers wouldn’t have a job. The firm may be earning excessive profits,…
Labor(workers per day) Total product (units per day) Marginal product Average product 0 0 0 0 1 2 2 2 2 8 ​ ​ 3 12 ​ ​ 4 15 ​ ​ 5 16 1 ​ In the above table, the marginal product is greatest when the   fourth worker is hired.   first worker is hired.   third worker is hired.   second worker is hired.
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