Question

1.67 pts Bob's Taco Shack has hired a worker to stand on the corner and wave a sign advertising his business. It costs him $15 per hour to have this worker stand on the corner. Each customer spends an average of $3 when they visit his shack. He has found his total customer count increases with each hour he hires the sign waving worker, as indicated in the table: HOURS TOTAL CUSTOMERS PER DAY 0 50 70 N 88 3 100 4 108 5 112 The marginal cost of hiring the worker for one hour is $ The marginal benefit of hiring the worker for a second hour is $ hours. Bob's best choice is to hire the worker for Enter whole numbers.

Answer 1

The information can be used to complete the table as follows:

Hours per day	Total Customers	Variable Cost of Worker	Marginal Cost of Worker	New Customers Added	Marginal Benefit of Worker ($3 x no. of customers)
0	50	-	-	-	-
1	70	15	15	20	60
2	88	30	15	18	54
3	100	45	15	12	36
4	108	60	15	8	24
5	112	75	15	4	12

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The marginal cost of hiring the worker for one hour is $15.

This is a constant marginal cost.

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The marginal benefit of hiring the worker for a second hour is $54.

This is found by benefit of $3 per customer for 18 customers, at the second hour.

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Bob's best choice is to hire the worker for 4 hours.

This is where Marginal benefits are greater than Marginal costs. After this, MC is greater than MB.