especially question 3 and 4
You are starting up \"Student Painters 'R Us." which paints houses in your local area. You have painted before. have some experience with the business, and have the capital (ladders and paint truck). A house takes one worker one ten-hour day to paint. and you receive the market price for a painted house of $300. By adding additional student painters to your crew you can increase your output of painted houses as follows: Painted Painters Houses 1 1.00 1.71 2.28 2.80 3.23 3.64 mmhmm Note that a unit of labour is one tenhour day of painting by one student. You may convert hourly wages below to a daily wage by multiplying by ten in all calculations. 1) Calculate the marginal product of labour for each student painter and the value of the marginal product of labour (which is the same as the marginal revenue product of labour if the house painting market is perfectly competitive. which you may assume). Graph the value of the marginal product of labour curve. [2 marks] 2) If the market wage for a student painter is $15 per hour or $150 per day of painting, how many student painters should you hire {including yourself) at the market wage? If the lease cost of your capital (ladders and truck) is $175, what is your profit? What is your profit from hiring either one more or one fewer student painter? [3 marks] 3) The market wage for professional painters is $30 per hour or $300 per day of painting, but professional painters increase the output (painted houses. ignoring any quality differences between houses painted by students and professionals) by 50%. Le. a professional can paint 1.5 houses in one day. tw0 can paint 2.56 houses. etc. If you hired only professional painters. how many painters would you hire and what would be your profit? [Remember that your capital cost is still $175.] Do you prefer student or professional painters for your operation? [2 marks] 4) Suppose that only professionals can operate a spray painter. which increases productivity by one- third. Le. a professional painter can new paint 2 houses in a ten-hour day with the additional capital. two can paint 3.41 houses, etc. The lease cost of the spray painter is $75. bringing total capital cost to $250 per day. Graph and compare the value of the value of the marginal product of labou:r curves here and in question (3). How many professional painters would you hire now and what would be your profit? Would you now prefer student or professional painters? [3 marks]
