Table 18-10
Consider the following daily production data for Caroline's Cookies, Inc. Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day.

-Refer to Table 18-10.What is the value of the marginal product of the fifth worker?

Question

Table 18-10
Consider the following daily production data for Caroline's Cookies, Inc. Caroline's sells cookies for $2.50 each and pays the workers a wage of $325 per day.
 
-Refer to Table 18-10.What is the value of the marginal product of the fifth worker?

Quizplus · Accepted Answer

To calculate the value of the marginal product of the fifth worker, we need to find the difference between the total product of five workers and the total product of four workers. 
Total product of four workers = 150 + 75 + 70 + 55 = 350
Total product of five workers = 200 + 100 + 90 + 70 + 60 = 520
Marginal product of the fifth worker = Total product of five workers - Total product of four workers = 520 - 350 = $170
However, the wage of the fifth worker is $325, which is greater than the marginal product. Therefore, it is not economically efficient to hire the fifth worker. 
The best choice is not to hire the fifth worker.

Table 18-10 Consider the Following Daily Production Data for Caroline's Cookies, Inc