A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The farmer's product sells for $3 per unit, and the wage rate is $13 per worker. The marginal revenue product of the second worker is
A) $24.
B) $8.
C) $15.
D) $9.

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) is calculated by multiplying the marginal product (MP) of the worker by the price of the product. The MP of the second worker is 32 - 24 = 8 units. Therefore, the MRP is 8 units * $3/unit = $24.

A Farmer Who Has Fixed Amounts of Land and Capital