Table 18-4
Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day.

-Refer to Table 18-4.What is the value of the marginal product of the first worker?

Question

Table 18-4
Consider the following daily production data for Wills Golf Balls.Wills sells golf balls for $2.50 cents each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-4.What is the value of the marginal product of the first worker?

Quizplus · Accepted Answer

The value of the marginal product (VMP) for the first worker can be calculated by taking the difference between the total revenue of producing 2 golf balls (2 x $2.50 = $5) and the total revenue of producing only 1 golf ball ($2.50). Therefore, the VMP of the first worker is $2.50. 
Since the worker is paid a wage of $325 per day, hiring the first worker would not be cost-effective as their VMP is less than their wage. However, hiring the second worker would be cost-effective as their VMP ($5) is greater than their wage ($325), so the best choice would be to hire the second worker.

Table 18-4 Consider the Following Daily Production Data for Wills Golf Balls.Wills