Table 31.1 $$\begin{array} { | r | c | c | c | }
\hline \begin{array} { c }
\text { Wage rate (dollars } \
\text { per hour) }
\end{array} & \begin{array} { c }
\text { Labor demanded } \
\text { (workers) }
\end{array} & \begin{array} { c }
\text { Total labor cost } \
\text { (dollars per hour) }
\end{array} & \begin{array} { c }
\text { Marginal } \
\text { Wage (dollars per } \
\text { worker) }
\end{array} \
\hline \$ 26 & 0 & & \text { - } \
\hline 24 & 2 & & \
\hline 18 & 4 & & \
\hline 14 & 6 & & \
\hline 10 & 8 & & \
\hline
\end{array}$$ Table 31.1 shows the number of workers a firm is willing to hire per hour at different wage rates.Complete the table by computing the total wage bill (total labor cost)and the marginal wage.Assume the union collects dues of 1 percent of the total wage bill.How many workers would the union want hired in Table 31.1 if its goal was to maximize the amount of dues collected?
A)2.
B)4.
C)6.
D)8.

Question

Table 31.1 $$\begin{array} { | r | c | c | c | } 
\hline \begin{array} { c } 
\text { Wage rate (dollars } \
\text { per hour) }
\end{array} & \begin{array} { c } 
\text { Labor demanded } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Total labor cost } \
\text { (dollars per hour) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { Wage (dollars per } \
\text { worker) }
\end{array} \
\hline \$ 26 & 0 & & \text { - } \
\hline 24 & 2 & & \
\hline 18 & 4 & & \
\hline 14 & 6 & & \
\hline 10 & 8 & & \
\hline
\end{array}$$ Table 31.1 shows the number of workers a firm is willing to hire per hour at different wage rates.Complete the table by computing the total wage bill (total labor cost)and the marginal wage.Assume the union collects dues of 1 percent of the total wage bill.How many workers would the union want hired in Table 31.1 if its goal was to maximize the amount of dues collected?
A)2.
B)4.
C)6.
D)8.

Quizplus · Accepted Answer

The union wants to maximize the amount of dues collected, which is 1 percent of the total wage bill. The total wage bill is the wage rate times the number of workers hired. The marginal wage is the change in the total wage bill divided by the change in the number of workers hired. The marginal wage is equal to the wage rate when the number of workers hired is zero. As the number of workers hired increases, the marginal wage decreases. The union wants to hire the number of workers where the marginal wage is equal to the dues rate, which is 1 percent of the wage rate. In this case, the marginal wage is equal to the dues rate when the wage rate is $14 and the number of workers hired is 6. Therefore, the union would want to hire 6 workers in Table 31.1 if its goal was to maximize the amount of dues collected.

Table 311 Table 311 Shows the Number of Workers a Firm Is Willing