Apply: Think Like an Economist Assignment Instructions
The accompanying table shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.
|
1 |
$30,000 |
|
|
$8,000 |
|
2 |
$42,426 |
|
$17,000 |
|
|
3 |
|
$17,321 |
$27,000 |
|
|
4 |
$60,000 |
|
|
$9,500 |
|
5 |
|
$13,416 |
$50,000 |
|
Complete the following:
· Calculate the total value of donations raised by three employees, and explain the method you used to make this calculation.
· Calculate the total labor cost with four employees, and explain the method you used to make this calculation.
· Analyze the relationship between average benefits and average costs by filling in the blanks in the following statement:
o If the President of State U decides to hire fundraising employees as long as their average benefit exceeds their average cost, then this results in ________ employees being hired and a net benefit (total donations minus total labor costs) of ________.
· Evaluate the marginal benefit (in terms of extra donations) of the 2nd employee.
· Explain how the marginal cost of the 4th employee will increase the total labor cost.
· Determine when the net benefit of hiring fundraisers is the largest.
Submit your assignment.