John Ridley has a business converting 'invisible fence' pet boundary alarm systems into a 'perfect ref' tennis
Question:
John Ridley has a business converting 'invisible fence' pet boundary alarm systems into a 'perfect ref' tennis aid that determines automatically whether a served ball landed in our out of bounds in tennis matchesProduction of the sets requires,installers, who are relatively high- skilled electricians, andconverters, who are lower skilled workers.The systems sell for $200 per unit.At current output levels, John observes that the marginal product of installers is 30 systems per week, and the marginal product of converters is 18 systems per week.If John must pay $25 per hour per installer and $12 per hour per converter, why and how should he adjust his input mix?
A) John should hire relatively more converters, because they their marginal productivity per dollar spent is higher.
B) John should hire relatively more installers, because their marginal product per dollar spent is higher.
C) John's productivity figures indicate that he currently is employing a least combination of the two types of inputs.
D) John should hire both of both sorts of input because labor costs are only a small part of the 'perfect ref' system's price.