Assignment:
Apply: Think Like an Economist Assignment Instructions
The accompanying table shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.
|
Number of Employees
|
Total Donations
|
Average Donations
|
Total Labor Costs |
Average Labor Costs
|
|
1
|
$30,000
|
|
|
$8,000
|
|
2
|
$42,426
|
|
$17,000
|
|
|
3
|
|
$17,321
|
$27,000
|
|
|
4
|
$60,000
|
|
|
$9,500
|
|
5
|
|
$13,416
|
$50,000
|
|
Complete the following:
• Calculate the total value of donations raised by three employees, and explain the method you used to make this calculation.
• Calculate the total labor cost with four employees, and explain the method you used to make this calculation.
• Analyze the relationship between average benefits and average costs by filling in the blanks in the following statement:
o If the President of State U decides to hire fundraising employees as long as their average benefit exceeds their average cost, then this results in ________ employees being hired and a net benefit (total donations minus total labor costs) of ________.
• Evaluate the marginal benefit (in terms of extra donations) of the 2nd employee.
• Explain how the marginal cost of the 4th employee will increase the total labor cost.
• Determine when the net benefit of hiring fundraisers is the largest.