Exhibit 11-10 Labor and wage rate data $$\begin{array} { | c | c | }
\hline \text { Labor } & \text { Wage } \
\hline 6 & \$ 12 \
7 & 13 \
8 & 14 \
9 & 15 \
10 & 16 \
\hline
\end{array}$$
-In Exhibit 11-10, the marginal factor cost of the 8th employee is:

Question

Exhibit 11-10 Labor and wage rate data $$\begin{array} { | c | c | } 
\hline \text { Labor } & \text { Wage } \
\hline 6 & \$ 12 \
7 & 13 \
8 & 14 \
9 & 15 \
10 & 16 \
\hline
\end{array}$$
-In Exhibit 11-10, the marginal factor cost of the 8th employee is:

Quizplus · Accepted Answer

The marginal factor cost is the change in total cost when an additional unit of labor is hired. The cost for the 8th employee is $14, and the cost for the 7th employee is $13, so the marginal factor cost is $14 - $13 = $1. However, since the wage rate increases by $1 for each additional employee, the total increase in cost when hiring the 8th employee is $8 (the wage rate of $14 times the number of employees, 8) minus $7 (the wage rate of $13 times the number of employees, 7), which equals $21.

Exhibit 11-10 Labor and Wage Rate Data -In Exhibit 11-10, the Marginal Factor Cost of the 8th