The city of Montrose cannot hire any more workers, but it can buy new garbage trucks. If it buys one more garbage truck it can serve 100 more households each day. What do the 100 additional households represent?

Question

Quizplus · Accepted Answer

The 100 additional households represent the marginal product of capital, which refers to the additional output (in this case, service to households) that results from the use of one more unit of capital (in this case, a garbage truck).

The City of Montrose Cannot Hire Any More Workers, but It