Think Like an Economist

The accompanying table shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.

Complete the following:

• Calculate the total value of donations raised by three employees, and explain the method you used to make this calculation.
• Calculate the total labor cost with four employees, and explain the method you used to make this calculation.
• Analyze the relationship between average benefits and average costs by filling in the blanks in the following statement:
• If the President of State U decides to hire fundraising employees as long as their average benefit exceeds their average cost, then this results in ________ employees being hired and a net benefit (total donations minus total labor costs) of ________.
• Evaluate the marginal benefit (in terms of extra donations) of the 2nd employee.
• Explain how the marginal cost of the 4th employee will increase the total labor cost.
• Determine when the net benefit of hiring fundraisers is the largest.  

*Must be in APA Style Format