Labor Economics 6th Edition by George Borjas

تمرين 3

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 MC = 4 N, where N is the number of bicycles assembled per hour. Donna's marginal cost is MC = 6 N.
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 eight-hour day