2 The following graph shows the MB for security guards of each store (A to H). The horizontal t-lineindicates the agreed equal cost-share of $50 (7 stores) to hire one security guard ($350). They canhire one to seven guards.50MBM MMBMIL1.Security Guards per Weeki. If they vote on 5 guards vs. 6 guards, which option will win the vote?ii. If they vote on 2 guards vs. 3 guards, which option will win the vote?Marginal Benefit, Co

i.) For 5 Gurads: 5 * 350= 1750 Store shares= 1750/ 7 = 250 For 6 Gurads: 6 * 350= 2100 Store…

Answered: The following graph shows the MB for…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 8MC

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Suppose you manage a factory with ten workers. Each worker’s output is determined by the equation q = e. Output sells in the market for a price of 40. The firm has fixed cost equal to 800, and variable costs aside from labor are 8 per unit of output. Worker utility is U = w – e2. Suppose you are paying workers a wage equal to bq. What is the profit- maximizing value of b? Suppose that the probability of worker error increases as the worker increases effort, and that worker error results in unusable output. Suppose that the probability of worker error is Pr[Error] = e/10. Then for worker effort level e, expected (usable) output is now determined by the equation E[q] = (1-Pr[Error]) x e. However, the problem is that you cannot detect errors until after the product is shipped to customers, meaning you pay workers for output before you know whether it is usable or not, and you have to refund your customers for unusable output. Demonstrate why you should not pay your workers the same…
At $300 per day what is the maximum number of mechanics Craig should hire?
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Give typing answer with explanation and conclusion When a company only pays workers .50 an hour why would this be acceptable according to Martin Wolf’s theory?

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