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2. A construction site uses two types of workers ? skilled (S) and unskilled (U)

ID: 2708978 • Letter: 2

Question

2. A construction site uses two types of workers ? skilled (S) and unskilled (U). They produce feet of new pavement (Q) per day according to the production function Q = 1005-5s^2 + 50U - 5U^2 Skilled workers are paid $200 per day, while unskilled workers are paid $100 per day. The company paid $50,000 for equipment for the skilled workers. The company has a daily budget of $1,500 to hire skilled and unskilled workers. a. How many skilled and unskilled workers should be hired in order to produce the most pavement? Show your work/thought process: b. What is the profit-maximizing Q?

Explanation / Answer

Accounts receivable at September 30:

From August sales: $900,000 × 10%....................

$90,000

From September sales:
$500,000 × (70% + 10%)................................

400,000

Total accounts receivable......................................

$490,000

From August sales: $900,000 × 10%....................

$90,000

From September sales:
$500,000 × (70% + 10%)................................

400,000

Total accounts receivable......................................

$490,000