You are the manager of a large but privately held online retailer that currently uses 17 unskilled workers and 6 semiskilled workers at its warehouse to box and ship the products it sells online. Your company pays its unskilled workers the minimum wage but pays the semiskilled workers $12.75 per hour. Thanks to government legislation, the minimum wage in your state will increase from $10.25 per hour to $10.75 per hour on July 24, 2017. Discuss the implications of this legislation for your company’s operations and in particular the implications for your optimal mix of inputs and long-run investment decisions. (LO1, LO2, LO6)
You are the manager of a large but privately held online retailer that currently uses 17 unskilled workers and 6 semiskilled workers at its warehouse to box and ship the products it sells online. Your company pays its unskilled workers the minimum wage but pays the semiskilled workers $12.75 per hour. Thanks to government legislation, the minimum wage in your state will increase from $10.25 per hour to $10.75 per hour on July 24, 2017. Discuss the implications of this legislation for your company’s operations and in particular the implications for your optimal mix of inputs and long-run investment decisions. (LO1, LO2, LO6)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You are the manager of a large but privately held online retailer that currently uses 17
unskilled workers and 6 semiskilled workers at its warehouse to box and ship the products it sells online. Your company pays its unskilled workers the minimum wage but
pays the semiskilled workers $12.75 per hour. Thanks to government legislation, the
minimum wage in your state will increase from $10.25 per hour to $10.75 per hour on
July 24, 2017. Discuss the implications of this legislation for your company’s operations
and in particular the implications for your optimal mix of inputs and long-run investment decisions. (LO1, LO2, LO6)
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