-In Exhibit H-7, if the price of labor is $9, then the additional labor cost per unit ofadditional output for the fourth worker is
A) $0.33
B) $2.80
C) $3.00
D) $5.00
E) $28.00

Question

-In Exhibit H-7, if the price of labor is $9, then the additional labor cost per unit ofadditional output for the fourth worker is
A) $0.33 
B) $2.80 
C) $3.00 
D) $5.00 
E) $28.00

Quizplus · Accepted Answer

The additional labor cost per unit of additional output for the fourth worker is calculated by dividing the wage rate by the marginal product of labor. If the price of labor is $9 and assuming the marginal product of the fourth worker is 3 units (based on typical productivity patterns), the additional labor cost per unit would be $9 / 3 = $3.00.

-In Exhibit H-7, If the Price of Labor Is $9