Aliyah is preparing to expand her IT consulting company. The current market rate for IT professionals is $58,000 per year. Each employee she hires will also require a computer and equipment that costs $6,000 per employee annually. Hiring more employees means that Aliyah can provide consulting services to more clie

Explanation:

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Aliyah is preparing to expand her IT consulting company. The current market rate for IT professionals is $58,000 per year. Each employee she hires will also require a computer and equipment that costs $6,000 per employee annually. Hiring more employees means that Aliyah can provide consulting services to more clients each year. Each client Aliyah has will pay her $10,000 per year.The number of clients Aliyah can take on is dependent on the number of workers she hires and is depicted in the accompanying table.Use this information to calculate the marginal cost and the marginal benefit of hiring each worker.Number of workers Clients per year0 01 112 203 274 32a. The first worker's marginal cost is $.b. The first worker's marginal benefit is $.c. The second worker's marginal cost is $.d. The second worker's marginal benefit is $.e. The third worker's marginal cost is $.f. The third worker's marginal benefit is $.g. The fourth worker's marginal cost is $.h. The fourth worker's marginal benefit is $.i. Using the rational rule to maximize her economic surplus, Aliyah should hire workers.

Based on the information given, the marginal cost of the workers will be calculated by adding the current market rate for the IT professionals to the cost of computer and equipment. The marginal benefit for each worker will be gotten by multiplying the amount paid to each worker by the number of clients. Therefore,

a. The first worker marginal cost is

= $58,000 + $6,000

= $64,000 per year

b.The marginal benefit per worker for hiring first worker will be:

= $10,000 × 11 clients

= $110,000

c . The second worker marginal cost is

= $58,000 + $6,000

= $64,000 per year

d The second worker marginal benefit will be:

= $10,000 × (20 clients - 11 clients)

= $10000 × 9 clients

= $90,000

e The third worker marginal cost will be:

= $58,000 + $6,000

= $64,000 per year

f. The third worker marginal benefit will be:

= $10,000 × (27 clients - 20 clients)

= $10000 × 7 client

= $70,000

g. The fourth worker marginal cost is

= $58,000 + $6,000

= $64,000 per year

h.The fourth worker marginal benefit will be:

= $10,000 × (32 clients - 27 clients)

= $10000 × 5 clients

= $50,000

i. Aliyah will employ 3 workers, due to the fact that extra marginal gain attached to the worker is more than its marginal cost.

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