Exhibit 21-14
Assume that labor is the only variable input and that each additional laborer is paid $600.
-Refer to Exhibit 21-14. What is the MPP of the first unit of labor [blank (C)]?

Question

Exhibit 21-14
  Assume that labor is the only variable input and that each additional laborer is paid $600.
-Refer to Exhibit 21-14. What is the MPP of the first unit of labor [blank (C)]?

Quizplus · Accepted Answer

The Marginal Physical Product (MPP) of the first unit of labor is the additional output produced by employing that first unit of labor. It is calculated as the change in total output when the labor input is increased from 0 to 1 unit. In this case, the total output increases from 0 to 100 units with the employment of the first unit of labor, making the MPP 100 units.

Exhibit 21-14 Assume That Labor Is the Only Variable Input