Table 18-2
The production details of a small apple farm are shown below. Suppose the market for both apple and apple pickers is competitive, with a current market price for a box of apples being $10. Further, assume apple pickers are the sole marginal cost faced by the farmer in selling his product.

-Refer to Table 18-2. What is the marginal product of labour of the fourth worker?

Question

Table 18-2
The production details of a small apple farm are shown below. Suppose the market for both apple and apple pickers is competitive, with a current market price for a box of apples being $10. Further, assume apple pickers are the sole marginal cost faced by the farmer in selling his product.
 
-Refer to Table 18-2. What is the marginal product of labour of the fourth worker?

Quizplus · Accepted Answer

The marginal product of labor for each additional worker is given in the table. The marginal product of the fourth worker is 8, which means that the fourth worker adds 8 boxes of apples to the total production. To maximize profits, the farmer should continue hiring workers until their marginal cost (the wage paid to the workers) equals their marginal product (the additional boxes of apples produced by the worker). Since the current market price for a box of apples is $10, the farmer should hire workers until the marginal product of labor falls to 10 - the cost of paying one worker.

Table 18-2 The Production Details of a Small Apple Farm Are Shown