Recently, some college alumni started a moving service for students living on campus. They have three employees and are debating hiring a fourth. The hourly wage for an employee is $18 per hour. An average moving job takes three hours. The company currently does three moving jobs per week, but with one more employee, the company could manage five jobs per week. The company charges $80 for a moving job.a. What would be the new employees' marginal product of labor? 5 jobs per weekb. What is the value of that marginal product?c. Should the moving service hire a fourth worker?

The employee's marginal product of labor is the additional output that the company gets out of an additional worker, at the actual level of production. In this case, as the company would go from 3 jobs to 5 jobs with the addition of an employee, the employee's marginal product of labor is 2 jobs/worker.

The value of marginal product is the value of this additional jobs that an additional employee will bring. In this case, each job is charged $80, so the value of that marginal product is 2*80=$160.

The cost of an additional employee is 3*18=$54. As the additional income ($160) is greater than the additional cost of a employee ($54), they should hire a fourth worker.

topeadeniran2 topeadeniran2 · Answer 2 · 2021-11-30T20:27:13+01:00

The new employee's marginal product of labor will be 2 moving jobs and the value of the marginal product is $160.

The new employee's marginal product of labor will be calculated thus:

= 5 - 3

= 2 moving job

The value of the marginal product is will be:

= 2 × 80

= $160

The cost of the fourth worker will be:

= Job time × Wage

= 2 × 3 × 18

= $108

In conclusion, the firm should hire a new worker since the marginal revenue is higher than the marginal cost.

Read related link on:

https://brainly.com/question/16971345