All else equal, an increase in the marginal product of workers will lead to _____ in the marginal revenue product of the firm, and the firm will hire _____ workers.
A) a decrease; fewer
B) a decrease; more
C) an increase; fewer
D) an increase; more

Question

Quizplus · Accepted Answer

An increase in the marginal product of workers means each additional worker is producing more output. This typically increases the marginal revenue product (the additional revenue the firm earns from hiring one more worker), leading the firm to hire more workers because they are now more productive.

All Else Equal, an Increase in the Marginal Product of Workers