Which of the following is true? At a given quantity of employment, if the i. value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10, the value of marginal product of the skill is $25.
Ii) value of marginal product of a high-skill worker is $35 and the value of marginal product of a low-skill worker is $10, the cost of acquiring the skill is $25.
Iii) value of marginal product of a skill is $25, then the wage rate must be $25.

Question

Quizplus · Accepted Answer

The value of marginal product of a skill is calculated by subtracting the value of marginal product of a low-skill worker from the value of marginal product of a high-skill worker. Therefore, if the value of marginal product of a high-skill worker is $35 and that of a low-skill worker is $10, the value of the marginal product of the skill is indeed $25, making statement i correct. Statements ii and iii confuse the value of marginal product with the cost of acquiring a skill and the necessity of the wage rate being equal to the value of marginal product of the skill, which are not necessarily true.

Which of the Following Is True? at a Given Quantity