If labor is fixed at 5 units,how much does the second unit of capital add to total output? Amount of total output produced from various combinations of labor and capital.
A)490
B)390
C)50
D)100
E)none of the above

Question

If labor is fixed at 5 units,how much does the second unit of capital add to total output?  Amount of total output produced from various combinations of labor and capital.
A)490 
B)390 
C)50 
D)100 
E)none of the above

Quizplus · Accepted Answer

In order to determine the marginal product of capital (the additional output produced by adding one more unit of capital), we need to compare the total output produced with and without the additional unit of capital.

Using the chart provided, we can see that when labor is fixed at 5 units, the total output with 1 unit of capital is 500 and the total output with 2 units of capital is 600. Therefore, the second unit of capital adds 100 units of total output (600-500=100).

If Labor Is Fixed at 5 Units,how Much Does the Second