At Hamill Manufacturing of Pennsylvania,highly skilled senior machinists are paid $70,000,excluding benefits,but the average skilled machinist generates approximately $137,000 in value added.This is partially because diminishing returns to labor cause the value of the marginal product of the last machinist hired to be greater than the average of all of the machinists employed.

Question

Quizplus · Accepted Answer

The statement about diminishing returns to labor causing the value of the marginal product of the last machinist hired to be greater than the average of all machinists employed is incorrect. Diminishing returns to labor typically mean that each additional unit of labor (e.g., a machinist) adds less to the total output than the previous one, which would make the marginal product less than the average, not greater.

At Hamill Manufacturing of Pennsylvania,highly Skilled Senior Machinists Are Paid