A firm can sell its output for $40 per unit. When it increases its labour force from 4 workers to 5 workers its output increases from 15 to 17 units. The value of marginal product of the 5th worker is
A) $340.
B) $80.
C) $40.
D) $680.

Question

Quizplus · Accepted Answer

The value of the marginal product of the 5th worker is calculated by multiplying the marginal product (the additional output produced by the 5th worker) by the price per unit. The marginal product is 2 units (17 units - 15 units), and the price per unit is $40. Therefore, the value of the marginal product of the 5th worker is 2 units * $40/unit = $80.

A Firm Can Sell Its Output for $40 Per Unit