Answer and Explanation:
a. The first worker marginal cost is
= The current market rate for IT professional + computer and equipment costing
= $58,000 + $6,000
= $64,000 per year
b.The marginal benefit per worker for hiring first worker is
= Pay each client × number of clients
= $10,000 × 11 clients
= $110,000
c . The second worker marginal cost is
= The current market rate for IT professional + computer and equipment costing
= $58,000 + $6,000
= $64,000 per year
d The second worker marginal benefit is
= Pay each client × number of clients
= $10,000 × (20 clients - 11 clients)
= $90,000
e The third worker marginal cost is
= The current market rate for IT professional + computer and equipment costing
= $58,000 + $6,000
= $64,000 per year
f. The third worker marginal benefit is
= Pay each client × number of clients
= $10,000 × (27 clients - 20 clients)
= $70,000
g. The fourth worker marginal cost is
= The current market rate for IT professional + computer and equipment costing
= $58,000 + $6,000
= $64,000 per year
h. The fourth worker marginal benefit is
= Pay each client × number of clients
= $10,000 × (32 clients - 27 clients)
= $50,000
I. Aliyah will employ 3 workers, because the extra marginal gain to the worker is greater than the marginal cost. It implies the hiring worker's cost is less than the benefits they receive.
