A firm employs Pam to assemble personal computers. Pam can assemble 1 computer if she works 1 hour, 4 computers in 2 hours, 8 computers in 3 hours, 10 computers in 4 hours, and 11 computers in 5 hours. Each computer consists of a motherboard that costs $200, a hard drive that costs $100, a case that costs $20, a monitor that costs $200, a keyboard that costs $60 and a mouse that costs $20. The cost of employing Pam is $40 per hour. What is the marginal cost of producing the computers Pam assembles during her 4^th hour of work?

Question

Quizplus · Accepted Answer

To find the marginal cost of the 41st computer Pam assembles, we need to determine her productivity during the 4th hour of work. From the information given, we know that Pam can assemble 10 computers in 4 hours. Therefore, during the 4th hour, she must have assembled 2 additional computers, bringing her total to 12.

The total cost of assembling 12 computers is:
12 x ($200 + $100 + $20 + $200 + $60 + $20) = $12,480

The cost of employing Pam for 4 hours is:
4 x $40 = $160

Therefore, the marginal cost of producing the 41st computer is:
($12,480 + $160) - ($12,260 + $160) = $1,240

Therefore, the best choice is B.

A Firm Employs Pam to Assemble Personal Computers