A manufacturing firm has received a contract to assemble 1000 units of test equipment in the next year. The firm must decide how to organize its assembly operation. Skilled workers, at $33 per hour each, can individually assemble the test equipment in 2.6 hours per unit. Alternatively, teams of four less skilled workers (at $19 per hour each) can assem- ble a unit in one hour. Which approach is more economical?

A manufacturing firm has received a contract to assemble 1000 units of test equipment in the next year. The firm must decide how to organize its assembly operation. Skilled workers, at $33 per hour each, can individually assemble the test equipment in 2.6 hours per unit. Alternatively, teams of four less skilled workers (at $19 per hour each) can assem- ble a unit in one hour. Which approach is more economical?

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis

Section: Chapter Questions

Problem 9TY

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