The table has the marginal products for workers at Bart's Bats, a cricket bat factory.
-Using the above table, suppose the price of a bat is $3. If the wage rate for a worker in a cricket bat manufacturing plant is $18 an hour, then the firm will hire ________ workers; if the wage rate falls to $12 an hour, then the firm will hire ________.

Question

Quizplus · Accepted Answer

To determine how many workers to hire, we need to compare the marginal product of each worker to the cost of hiring them (the wage rate). At a wage rate of $18 an hour, the marginal product for the first three workers is greater than the cost of hiring them, so the firm will hire three workers. At a wage rate of $12 an hour, the marginal product for the first five workers is greater than the cost of hiring them, so the firm will hire five workers. Therefore, the firm will hire 3 workers at a wage rate of $18 an hour and 5 workers at a wage rate of $12 an hour. The answer is D.

The Table Has the Marginal Products for Workers at Bart's