Brenda owns a construction company that employs bricklayers and other skilled tradesmen. Her firm’s MRP for bricklayers is $22.2
5 per hour for each of the first seven bricklayers, $18.50 for an eighth bricklayer, and $17.75 for a ninth bricklayer. Given that she is a price taker when hiring bricklayers, how many bricklayers will she hire if the market equilibrium wage for bricklayers is $18.00 per hour? A: Eight
B: More information is required to answer this question
C: Seven
D: Nine
E: Zero
Since Brenda is a price taker, she will be able to hire bricklayers as long as her marginal revenue product (MRP) is higher than her marginal cost of hiring another bricklayer.
A bricklayer's wage per hour is $18.00:
the first seven bricklayers provide a MRP of $22.25 which is larger than $18.00
the eighth bricklayer provides a MRP of $18.50 which is still larger than $18.00
but the ninth bricklayer provides a MRP of $17.75 which is lower than $18.00, so she shouldn't hire the ninth bricklayer.
During pre-Civil War times in the United States, banks around the country issued bank notes as a form of currency. The large number of banks led to a large number of diverse bank notes that circulated around the country. Although many banks issued only enough bank notes that could be backed up by specie (gold and silver during the time), riskier banks gave into temptation and issued more than they could cover. This practice caused many people to doubt the exact worth of certain notes and in turn have little faith in some banks.
