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5. You are the general manager for Mr. Ollinder ("Oll") MacDonald, who owns three farms that all produce wheat and that use only labor as inputs. He has seven loyal farmhands, who are all equally skilled and who he can assign to any of the three farms. Mr. MacDonald is committed to employing the farmhands and to growing wheat. Mr. MacDonald's friend, Mr. S.L.M. ("Slim") Pickins, is an agronomist who works for the U.S. Department of Agriculture. Mr. Pickins has estimated the following relationships between worker-years at a specific farm and total wheat yields (in thousands of bushels) per year at that farm: # of workers 1 2 3 4 5 6 7 Farm A 80 140 180 210 230 245 250 Farm B 40 70 90 105 115 120 123 Farm C 60 85 105 120 130 135 138 a. Mr. MacDonald wants to maximize the output that he can obtain by allocating the seven workers across the three farms. What allocation of the workers will maximize his output? Explain.

5. You are the general manager for Mr. Ollinder ("Oll") MacDonald, who owns three farms that all produce wheat and that use only labor as inputs. He has seven loyal farmhands, who are all equally skilled and who he can assign to any of the three farms. Mr. MacDonald is committed to employing the farmhands and to growing wheat. Mr. MacDonald's friend, Mr. S.L.M. ("Slim") Pickins, is an agronomist who works for the U.S. Department of Agriculture. Mr. Pickins has estimated the following relationships between worker-years at a specific farm and total wheat yields (in thousands of bushels) per year at that farm: # of workers 1 2 3 4 5 6 7 Farm A 80 140 180 210 230 245 250 Farm B 40 70 90 105 115 120 123 Farm C 60 85 105 120 130 135 138 a. Mr. MacDonald wants to maximize the output that he can obtain by allocating the seven workers across the three farms. What allocation of the workers will maximize his output? Explain.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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5. You are the general manager for Mr. Ollinder ("Oll") MacDonald, who owns three farms that all produce wheat and that use only labor as inputs. He has seven loyal farmhands, who are all equally skilled and who he can assign to any of the three farms. Mr. MacDonald is committed to employing the farmhands and to growing wheat. Mr. MacDonald's friend, Mr. S.L.M. ("Slim") Pickins, is an agronomist who works for the U.S. Department of Agriculture. Mr. Pickins has estimated the following relationships between worker-years at a specific farm and total wheat yields (in thousands of bushels) per year at that farm: # of workers 1 2 3 4 5 6 7 Farm A 80 140 180 210 230 245 250 Farm B 40 70 90 105 115 120 123 Farm C 60 85 105 120 130 135 138 a. Mr. MacDonald wants to maximize the output that he can obtain by allocating the seven workers across the three farms. What allocation of the workers will maximize his output? Explain.
Transcribed Image Text:5. You are the general manager for Mr. Ollinder ("Oll") MacDonald, who owns three farms that all produce wheat and that use only labor as inputs. He has seven loyal farmhands, who are all equally skilled and who he can assign to any of the three farms. Mr. MacDonald is committed to employing the farmhands and to growing wheat. Mr. MacDonald's friend, Mr. S.L.M. ("Slim") Pickins, is an agronomist who works for the U.S. Department of Agriculture. Mr. Pickins has estimated the following relationships between worker-years at a specific farm and total wheat yields (in thousands of bushels) per year at that farm: # of workers 1 2 3 4 5 6 7 Farm A 80 140 180 210 230 245 250 Farm B 40 70 90 105 115 120 123 Farm C 60 85 105 120 130 135 138 a. Mr. MacDonald wants to maximize the output that he can obtain by allocating the seven workers across the three farms. What allocation of the workers will maximize his output? Explain.
b. Suppose instead that Mr. MacDonald can hire all of the farm workers that he wants at a wage of $75,000/year (including benefits, etc.), and suppose also that he expects wheat to sell for $4/bushel. Now he wants to maximize his profits. How many workers should he hire? Explain.
Transcribed Image Text:b. Suppose instead that Mr. MacDonald can hire all of the farm workers that he wants at a wage of $75,000/year (including benefits, etc.), and suppose also that he expects wheat to sell for $4/bushel. Now he wants to maximize his profits. How many workers should he hire? Explain.
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