Question

The town of Bookville has a massive public library system. Bookville's municipal government faces a tradeoff between retaining the current number of library workers and replacing some of its workers with computers. The four options of workers and computers combinations available to the government are given in table below.

Number of workers

Number of computers

Choice A

30

50

Choice B

20

100

Choice C

10

150

Choice D

5

300

Computers and software cost $5,000 per year. In a non-unionized labor market, workers are paid $20,000 per year. In these circumstances, the optimal choice from a cost perspective for the Brookville city government is Choice (A, B, C, or D):
After the introduction of a strong union, the annual salary for workers increases to $30,000. In these circumstances, the optimal choice from a cost perspective for the Brookville city government is Choice (A, B, C, or D):

Answer 1