Question
Theaccompanying tableshows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for
Theaccompanying tableshows 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
Marginal Benefit
Average Donations
Total Labor Costs
Marginal Cost
Average Labor Costs
1
$30,000
$30,000
$8,000
$8,000
2
$42,426
$12,426
$21,213
$17,000
$9,000
$8,500
3
$51,963
$9,537
$17,321
$27,000
$10,000
$9,000
4
$60,000
$8,037
$15,000
$38,000
$11,000
$9,500
5
$67,080
$7,080
$13,416
$50,000
$12,000
$10,000
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:
- 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.
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