(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2, the value of the marginal product for the fifth worker is:
A)$0.
B)$20.
C)$40.
D)$60.

Question

Quizplus · Accepted Answer

The value of the marginal product of the fifth worker is equal to the additional revenue generated by hiring that worker, which can be found by the change in total product between the fourth and fifth worker multiplied by the price of the power cord. From the graph, the change in total product between the fourth and fifth worker is 10 units of output, and the price of a power cord is $2. Therefore, the value of the marginal product of the fifth worker is $2 * 10 = $40.