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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Business

Cannoli

24 February, 08:20

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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Nathaly · 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.