a. Draw a curve showing the following situation. As a firm hires more workers (X), its total revenue (Y) increases. However, total revenue increases at a decreasing rate such that each worker adds less to total revenue. Label the total revenue curve TR.

b. How is the slope of the total revenue curve related to the marginal benefit of hiring another worker?

c. Draw a curve showing the following situation. As a firm hires more workers (X), its total labor cost (Y) increases at a constant rate, each worker adding the same amount to total cost. Assume the firm’s only cost is labor cost. Label the total wage cost curve TWC.

d. How is the slope of the total cost curve related to the marginal cost of hiring another worker?

e. If, at a given X, the slope of the total revenue curve is larger than the slope of the total cost curve, should the Xth worker be hired?