A firm can hire 8 workers at a wage rate of $7 per hour but must pay $8 per hour to all of its employees to attract a ninth worker. The marginal wage cost of the ninth worker is
A)$8.
B)$9.
C)$16.
D)$72.

Question

Quizplus · Accepted Answer

The marginal wage cost of the ninth worker includes the $8 per hour for the ninth worker plus an additional $1 per hour for each of the 8 workers already hired (since their wage increases from $7 to $8 to attract the ninth worker), totaling $8 + (8 * $1) = $16.

A Firm Can Hire 8 Workers at a Wage Rate