Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople's productivity. Currently, each salesperson sells an average of 1 car per day while being paid $24 per hour for an 8-hour day. Instructions: Enter your answers as a whole number. a. What is the current labor cost per car sold? 2$ 96 b. Suppose that when the dealer raises the price of labor to $34 per hour, the average number of cars sold by a salesperson increases to 2 per day. What is now the labor cost per car sold? 2$ 68 8 By how much is it higher or lower than it was before? Lower O by $ 28 8 Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased? Increased c. Suppose that if the wage is raised a second time to $46 per hour, the number of cars sold rises to an average of 2.5 per day. What is now the labor cost per car sold? 2$ 74 8

Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople's productivity. Currently, each salesperson sells an average of 1 car per day while being paid $24 per hour for an 8-hour day. Instructions: Enter your answers as a whole number. a. What is the current labor cost per car sold? 2$ 96 b. Suppose that when the dealer raises the price of labor to $34 per hour, the average number of cars sold by a salesperson increases to 2 per day. What is now the labor cost per car sold? 2$ 68 8 By how much is it higher or lower than it was before? Lower O by $ 28 8 Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased? Increased c. Suppose that if the wage is raised a second time to $46 per hour, the number of cars sold rises to an average of 2.5 per day. What is now the labor cost per car sold? 2$ 74 8

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 5PA

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