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Labor Economics 6th Edition by George Borjas
Edition 6ISBN: 978-0073523200Labor Economics 6th Edition by George Borjas
Edition 6ISBN: 978-0073523200 Exercise 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
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
Explanation
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(a)
The hourly wages of workers are meas...
Labor Economics 6th Edition by George Borjas
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