Answer and Explanation:
a. The marginal cost for the first worker is
= Market rate for an IT professional + computer and equipment expenses
= $58,000 + $6,000
= $64,000 per year
b. The marginal benefit from hiring the first worker is
= Revenue per client × total number of clients
= $10,000 × 11 clients
= $110,000
c. The marginal cost for the second worker is
= Market rate for an IT professional + computer and equipment expenses
= $58,000 + $6,000
= $64,000 per year
d. The marginal benefit for the second worker is
= Revenue per client × additional clients
= $10,000 × (20 clients - 11 clients)
= $90,000
e. The marginal cost for the third worker is
= Market rate for an IT professional + computer and equipment expenses
= $58,000 + $6,000
= $64,000 per year
f. The marginal benefit for the third worker is
= Revenue per client × additional clients
= $10,000 × (27 clients - 20 clients)
= $70,000
g. The marginal cost for the fourth worker is
= Market rate for an IT professional + computer and equipment expenses
= $58,000 + $6,000
= $64,000 per year
h. The marginal benefit for the fourth worker is
= Revenue per client × additional clients
= $10,000 × (32 clients - 27 clients)
= $50,000
i. Aliyah should hire 3 workers since the additional benefits they provide exceed their marginal costs, indicating that the cost of hiring is lower than the benefits gained.