Profit-maximizing hiring practice problems

Microeconomics Unit 5. Try each one, then open the worked solution. The Credit Sprint app generates unlimited new versions with fresh numbers.

Problem 1.

Output sells for $10. The marginal products of workers 1–6 are 17, 15, 11, 8, 6, 2. The wage is $80. How many workers will the firm hire?

Show solution

MRP = MP × $10: $170, $150, $110, $80, $60, $20. Hire while MRP ≥ wage ($80): 4 workers.

Problem 2.

Output sells for $4. The marginal products of workers 1–6 are 21, 18, 16, 14, 11, 7. The wage is $44. How many workers will the firm hire?

Show solution

MRP = MP × $4: $84, $72, $64, $56, $44, $28. Hire while MRP ≥ wage ($44): 5 workers.

Problem 3.

Output sells for $2. The marginal products of workers 1–6 are 22, 19, 17, 14, 10, 8. The wage is $20. How many workers will the firm hire?

Show solution

MRP = MP × $2: $44, $38, $34, $28, $20, $16. Hire while MRP ≥ wage ($20): 5 workers.

Problem 4.

Output sells for $5. The marginal products of workers 1–6 are 22, 19, 16, 13, 9, 5. The wage is $80. How many workers will the firm hire?

Show solution

MRP = MP × $5: $110, $95, $80, $65, $45, $25. Hire while MRP ≥ wage ($80): 3 workers.

Problem 5.

Output sells for $2. The marginal products of workers 1–6 are 22, 18, 16, 12, 9, 6. The wage is $36. How many workers will the firm hire?

Show solution

MRP = MP × $2: $44, $36, $32, $24, $18, $12. Hire while MRP ≥ wage ($36): 2 workers.

Problem 6.

Output sells for $4. The marginal products of workers 1–6 are 18, 16, 13, 9, 6, 2. The wage is $52. How many workers will the firm hire?

Show solution

MRP = MP × $4: $72, $64, $52, $36, $24, $8. Hire while MRP ≥ wage ($52): 3 workers.