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Sarah's Family Restaurant uses waiters and bus-boys to serve diners. Currently, Sarah uses 3 waiters and 2 bus-boys on the standard dinner shift. The data below report the hourly output wage costs for each type of worker. Output is measured in rems of dinners served per hour. Use this information to answer the following questions:

Waters: MPw = 16 Pw = $8.00 per hour

Bus-boys: MPbb = 8 Pbb = $2.00 per hour

1) Is this combination of waiters and busboys the optimal?

2) Based on your answer above, what kind of changes should Sarah make?

Microeconomics, Economics

  • Category:- Microeconomics
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