If the price of pencils falls,the marginal product of labor will ________ and the value of the marginal product of labor will ________.
A) fall; fall
B) remain unchanged; increase
C) rise; rise
D) remain unchanged; decrease
E) remain unchanged; remain unchanged

Question

Quizplus · Accepted Answer

The marginal product of labor is determined by the productivity of labor and is not directly affected by the price of pencils, so it remains unchanged. However, the value of the marginal product of labor, which is the marginal product of labor multiplied by the price of the output (in this case, pencils), will decrease if the price of pencils falls.

If the Price of Pencils Falls,the Marginal Product of Labor