Duringthe campus Spring Fling, the bumper car ride has a problem of cars becoming disabledLin need of repair. Repair personnel can be hired at the rate of $10 per hour (paid based ontime onduty, including idle time), but they only work as one team. That is, if one person is hiredOne nepairpersoncan repair cars in 30 minutes on average. Two repairpeople take 20 minutesdistributed).Tuợt consider the option of hiring two repairpeople.What is the average cost (out-of-pocket cost plus opportunity cost) per hour? (S/hr)(A)(B)(C)(D)(E)$70$80$90$100$110

We are going to find the explicit and implicit cost per hour to answer this question.

During the Lin need of repair. Repair personnel can be hired at the rate of $10 per hour (paid based on ing, the bumper car ride has a pro duty, including idle time), but they only work as one team. That is, if one person is hired time on he or she works alone; two or three people only work together on the same repair. One nepairperson per car on average, and three take 15 minutes per car on average. Each car that is disabled incurs lost income of $40 per hour. Cars tend to break down at the rate of two per hor. (Assume that the interarrival times and service times for the repair center are both exponentially a can repair cars in 30 minutes on average. Two repairpeople take 20 minutes distributed.). First consider the option of hiring two repairpeople. What is the average cost (out-of-pocket cost plus opportunity cost) per hour? ($/hr) (A) (B) (C) (D) (E) $70 $80 $90 $100 $110

During the Lin need of repair. Repair personnel can be hired at the rate of $10 per hour (paid based on ing, the bumper car ride has a pro duty, including idle time), but they only work as one team. That is, if one person is hired time on he or she works alone; two or three people only work together on the same repair. One nepairperson per car on average, and three take 15 minutes per car on average. Each car that is disabled incurs lost income of $40 per hour. Cars tend to break down at the rate of two per hor. (Assume that the interarrival times and service times for the repair center are both exponentially a can repair cars in 30 minutes on average. Two repairpeople take 20 minutes distributed.). First consider the option of hiring two repairpeople. What is the average cost (out-of-pocket cost plus opportunity cost) per hour? ($/hr) (A) (B) (C) (D) (E) $70 $80 $90 $100 $110

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 15P

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