A city is trying to estimate the most money it should offer to contractors as an incentive for them to finish a disruptive road project early. The transportation project lengthens transport times by 10 hours per week for 40,000 workers. Assume that all workers are paid $10 per hour in a perfectly competitive labor market. What is the most that the city should pay to the contractors as an incentive for completing the project four weeks early? HTML EditorKeyboard Shortcuts

Question

Haleigh Boyle

Business

13 November, 23:52

A city is trying to estimate the most money it should offer to contractors as an incentive for them to finish a disruptive road project early. The transportation project lengthens transport times by 10 hours per week for 40,000 workers. Assume that all workers are paid $10 per hour in a perfectly competitive labor market. What is the most that the city should pay to the contractors as an incentive for completing the project four weeks early? HTML EditorKeyboard Shortcuts

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Tara Hardin · Answer 1

The city should pay at most $16 million to the contractors as an incentive for completing the project four weeks earlier.

Explanation:

Total number of saved work hours = 4 weeks * 40000 workers/week * 10 hours/worker = 1,600,000 work hours

So, Money saved = 1,600,000 work hours * $10 / work-hour

= $16 million

Therefore, the city should pay at most $16 million to the contractors as an incentive for completing the project four weeks earlier.