The manager of the customer service department at a bank can hire employees with a high school degree (HS)who earn $10,000 annually or employees with a bachelor's degree (B)who earn $20,000.The manager wants to maximize the number of customers served given a fixed payroll. Given the above info,if the manager currently has three HS and three B,what must be true?
A)More customers could be served if the manager hires fewer HS and more B.
B)More customers could be served if the manager hires more HS and fewer B.
C)The manager is making the correct decision because the marginal contributions are proportionate.
D)The manager is not making the correct decision because bachelor's degree holders are more productive at all levels of customer served. .

Question

The manager of the customer service department at a bank can hire employees with a high school degree (HS)who earn $10,000 annually or employees with a bachelor's degree (B)who earn $20,000.The manager wants to maximize the number of customers served given a fixed payroll.  Given the above info,if the manager currently has three HS and three B,what must be true?
A)More customers could be served if the manager hires fewer HS and more B. 
B)More customers could be served if the manager hires more HS and fewer B. 
C)The manager is making the correct decision because the marginal contributions are proportionate. 
D)The manager is not making the correct decision because bachelor's degree holders are more productive at all levels of customer served. .

Quizplus · Accepted Answer

With a fixed payroll, the manager can hire six HS employees or three B employees. However, three B employees serve more customers than six HS employees, so the manager should hire more HS employees to increase the number of customers served. Thus, more customers could be served if the manager hires more HS and fewer B.

The Manager of the Customer Service Department at a Bank