ZuoTi.Pro
Question

A new recreational area in a small town will take 20 full-time (40 hours per week)...

A new recreational area in a small town will take 20 full-time (40 hours per week) workers 3 weeks to complete. In addition, the cost of materials is expected to be $75,000.

a. If the labor market is perfectly competitive and the market wage is $20, what are the total opportunity costs of taking on this project? SHOW YOUR WORK AND EXPLAIN?

b. If instead the 20 individuals hired were unemployed and valued leisure at $10 per hour, would the opportunity cost of the project change? SHOW YOUR WORK AND EXPLAIN DIFFERENCE BETWEEN (a) and (b)

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Solution

Number of workers = 20

Working hours = 40 hours per week

Duration = 3 weeks

Cost of material = $ 75000

(a) When the labor market is perfectly competitive

Market wage = $20

Cost of Labor = No of Workers * Working hours * Duration = 20*40*3 = 2400

Total Labor Cost = 20 *2400 = $48000

The total opportunity costs of taking on this project are equal to

= Total labor cost + material cost

= $(48000 +75000) = $123000

(b)

Yes, there will be a change in the opportunity cost when 20 individuals hired were unemployed and valued leisure at $10 per hour. These unemployed individuals will be working as a laborer will value their time for working less than $20 an hour, which in turn leads to lowering of the opportunity cost of the project.

0 0
Add a comment
Know the answer?
Add Answer to:
A new recreational area in a small town will take 20 full-time (40 hours per week)...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 2. Sacramento wants to build a new basketball stadium. This project will take 1,000 workers who...

    2. Sacramento wants to build a new basketball stadium. This project will take 1,000 workers who cach work 2,000 hours to complete a. If the labor market is perfectly competitive, and if the market wage for the workers is S30, then what is the opportunity cost of the labor? b. Suppose, instead, that there is unemployment among workers and some workers for the stadium would willingly work for $10. What is the opportunity cost of labor for those workers who...

  • The staff demand at student store in terms of hours per week is given below: Week...

    The staff demand at student store in terms of hours per week is given below: Week 1 2 3 4 Staff Demand (hours) 300 340 345 265 At the beginning of each week, the store hires students to fulfill its staff demand. Students hired in week 1 work for 3 consecutive weeks (i.e., a student hired in week 1 works for weeks 1, 2 and 3); each of these students works for 15 hours per week and is paid $450...

  • INCOME (Dollars) Kate has 80 hours per week to devote to working or to leisure. She...

    INCOME (Dollars) Kate has 80 hours per week to devote to working or to leisure. She is paid an hourly wage and can work at her job as many hours a week as she likes. The following graph illustrates Kate's weekly income-lelsure tradeoff. The three lines labeled BC, BC, and BC illustrate her time allocation budget at three different wages; points A, B, and C show her optimal time allocation choices along each of these constralints BC 1200 BC 800...

  • Please see the attachment for the full question. How should I draw the income leisure graph...

    Please see the attachment for the full question. How should I draw the income leisure graph from part a) and part b), and what are the slopes? Also, what are the differences between part a) and b), and how will they affect the economy? Thank you. 2. Consider a province with the following employment insurance (EI) program. Individuals choose to allocate labour and leisure across 52 weeks of the year. All individuals who have worked for at least 10 weeks...

  • Kirpa is trying to decide how many hours to work each week. Her utility is given by the following function: U(C,H) = C2 H3 , where C represents weekly consumption and H represents weekly leisure hours...

    Kirpa is trying to decide how many hours to work each week. Her utility is given by the following function: U(C,H) = C2 H3 , where C represents weekly consumption and H represents weekly leisure hours. Her marginal utility with respect to consumption is MUc = 2CH3 , and her marginal utility with respect to leisure is MUH = 3C2 H2 . A) Find Kirpa's optimal H, L and C when w=$7.50 and a = $185. B) Suppose w increases...

  • Assume that Indirect project costs are $75,000 per week Crash the network (one week at a time) un...

    Assume that Indirect project costs are $75,000 per week Crash the network (one week at a time) until you reach the optimum cost-time point. Document your crashes clearly. d. What is the project length at the optimum point? MGMT 4143 Ch 9 HomeworkDue 3/27, 9pm NOTE due date is changed All work must be done in Excel Put each problem on a separate worksheet tab Label the worksheet tabs, put your name on each worksheet. Note: Crash the networks as...

  • 1. The population of Willits is 100 people: 40 work full-time, 20 work half-time but would...

    1. The population of Willits is 100 people: 40 work full-time, 20 work half-time but would prefer to work full- time, 10 are looking for a job, 10 would like to work but are so discouraged they have given up looking, 10 are not interested in working because they are full-time students, and 10 are retired. a. How many people are in the labor force? b. How many people are unemployed? 2. Suppose Congress passes a law requiring employers to...

  • Gina works at a diner. She has 100 hours each week to spend at labor/leisure, earns...

    Gina works at a diner. She has 100 hours each week to spend at labor/leisure, earns a wage of $15 per hour, and works in a fancy modern restaurant that doesn't involve tips from customers. She has no sources of non-labor income, but she does have to pay $200 per week in childcare for her precious baby Carlos (regardless of how many hours she actually utilizes the childcare). Her utility function is U 1. 0.001CL2 (3 points) Each week she...

  • Exhibit 11.1 Dollars per hour of labor our of haber per peribel 3. Refer to Exhibit...

    Exhibit 11.1 Dollars per hour of labor our of haber per peribel 3. Refer to Exhibit 1 1.1. If this represents the resource market for truck drivers, what is the truck driver's pay derived from? a. from wage ceilings b. from wage floors c. from the quantity of trucks d. from the supply for transporting goods e. from the demand for transporting goods 8:36 PM Tue Mar 24 9 86% 2620Micro copy Draw Layout Home Insert Review + View Draw...

  • The Town of Pawnee recently sent a survey to each of the residents asking them how...

    The Town of Pawnee recently sent a survey to each of the residents asking them how much they would be willing to pay for each acre of a proposed park. The results of the survey are shown below. # of Acres Ann Leslie Tom Ron 100 $400 $1000 $50 $0 200 $600 $1500 $30 $0 300 $400 $2000 $20 $500 400 $200 $2500 $10 $0 500 $100 $3000 $0 $0 (3 points) Assuming that creating the park costs $5/acre (or...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT