Hi All,
Although the prompt does not state it, we're meant to assume a constant rate for all activities (meaning that increasing one's work time by 50% leads to an equivalent 50% increase in output). Since each worker is increasing his/her work time from 8 hours to 12 hours (which is an increase of 50%), then we're meant to assume that the number of tax returns prepared will also increase by 50%. At this point, we can do the math in a couple of different ways - you can either calculate the difference now and then increase it by 50% or increase both results by 50% and then compare the difference. Thus the two workers would earn a total of...
Tax Preparer A: (24 tax returns)($75 each) = $1800
Tax Preparer B: (18 tax returns)($90 each) = $1620
The first preparer will make $1800 - $1620 = $180 more than the second preparer.
Final Answer:
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Rich
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