Question

Page < 5 > of 9 0 - ZOOM + 2. A construction site uses two types of workers - skilled (s) and unskilled (U). They produce feet of new pavement (Q) per day according to the production function Q = 1005 - 5S? + 50U - 5U2 Skilled workers are paid $200 per day, while unskilled workers are paid $100 per day. The company paid $40,000 for equipment for the skilled workers. The company has a daily budget of $2,000 to hire skilled and unskilled workers. a. How many skilled and unskilled workers should be hired in order to produce the most pavement? Show your work/thought process:

Answer 1

a) Given, Q=1005-55² +500 - 50? Budget constraint 7 2005+ 1000 - 2000. 2005+1000 2000. Satisfyed values » (su) - (92) (10,0) (8,4) (7,6) (6,8) If we (s, 0) =( 9, 2) 2001) + 1001 - 2000x9400 x 2 » 2000 Q = 100S-55 + 500 -5U? (8,0) = (1, 2) = Q = 100 (9)_5(81) + 50/2) – 5(4) - 575 (5,0) = (8,4) Q = 100(8) – 5 (64) + 50(4) - 5 (16) = 600 (5,0) = (10,0) = Q = 100(10) -5(100) + 50) – 60.) = 500 (5,0) = (7,6) Q = 100/7) – 5(49) + 50/6) - 5(36) = 575. (5,0)= (6,8) Q = 500.

so, from above values of (su) Bahir fying Budget constramt, (5,0) + (68, 4 gives the most pavement ie 600. so skilled worken = 8) unskilled workers = 147 profit-maximizing a Q = 1008-55² +500 - 50? profit maximises when S=8&U=A. Q = 100(8) -5689°+ 50(1) -5(4) = 800 – 5(64) + 501 A -5(16) (a = 600