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 2 cars per day while being paid $26 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? $ b. Suppose that when the dealer raises the price of labor to $36 per hour, the average number of cars sold by a salesperson increases to 4 per day. What is now the labor cost per car sold? 2$ By how much is it higher or lower than it was before? |(Click to select) v|by $ Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased? Click select) c. Suppose that if the wage is raised a second time to $49 per hour, the number of cars sold rises to an average of 5 per day. What is now the labor cost per car sold?

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 2 cars per day while being paid $26 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? $ b. Suppose that when the dealer raises the price of labor to $36 per hour, the average number of cars sold by a salesperson increases to 4 per day. What is now the labor cost per car sold? 2$ By how much is it higher or lower than it was before? |(Click to select) v|by $ Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased? Click select) c. Suppose that if the wage is raised a second time to $49 per hour, the number of cars sold rises to an average of 5 per day. What is now the labor cost per car sold?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Financial Statements

Financial statements (or financial reports) are the formal records of the financial activities that are undertaken by a firm. They are convenient instruments used for analyzing a company’s financial position and performance. Financial ratios are created with the help of the numerical values that are derived from the financial statements. They give meaningful information about the financial performance of the company.

Question

A,B, and C

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 2 cars per day while being paid $26 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?
$
b. Suppose that when the dealer raises the price of labor to $36 per hour, the average number of cars sold by a salesperson increases
to 4 per day. What is now the labor cost per car sold?
$
By how much is it higher or lower than it was before?
(Click to select) v by $
Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased?
(Click to select) ♥
c. Suppose that if the wage is raised a second time to $49 per hour, the number of cars sold rises to an average of 5 per day. What is
now the labor cost per car sold?
d. If the firm's goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $26 per
hour, $36 per hour, or $49 per hour?
$
e. By contrast, which salary maximizes the productivity of the car dealer's workers (cars sold per worker per day)?
%24

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