In the Green Grape Company, the relationship between output (Q) and the number of hours of skilled labor (S) and unskilled labor (U) is +220U-0.2452-0.32U² Q=360S The hourly wage of skilled labor is $15, and the hourly wage of unskilled labor is $5. The firm can hire as much labor as it wants at these wage rates.
a. Green Grape's chief engineer recommends that the firm hire 420 hours of skilled labor and 250 hours of unskilled labor. Evaluate this recommendation. Is it correct? What is the correct combination?
b. If the Green Grape Company decides to spend a total of $5,900 on skilled and unskilled labor, how many hours of each type of labor should it hire?
c. If the price of a unit of output is $10 (and does not vary with output level), how many hours of unskilled labor should the company hire? Round your final answer to the nearest integer. (Note that we no longer assume that a total of $5,900 is spent on labour. Thus, the answer is different than that in part b)
