Suppose a project needs to hire 50 electricians. At the initial wage of 60K/year (including benefits) 480 are currently employed in the local area and 20 are estimated to be unemployed. The MEBT is 0.2. After electricians are hired for the project, the local wage increases to 65K/year and the number employed locally increases to 510.

a. Estimate the opportunity cost of hiring the workers.

b. Draw a diagram to illustrate.

c. Explain any assumptions you make.

Answer rating: 100% (QA)

A Opportunity cost refers to the forgone cost here opportunity cost difference between re... View the full answer