The value of marginal product of labor
A) always increases as more labor is hired.
B) is constant as long as each worker is paid the same wage rate.
C) declines only if each worker is paid more than the previous worker.
D) at some point declines as more workers are hired.
E) at first decreases and then increases as more workers are hired.

Question

Quizplus · Accepted Answer

The value of marginal product of labor (VMPL) is the additional output produced by hiring one more unit of labor. This additional output may decrease at some point as more workers are hired because of diminishing marginal returns. This means that as the number of workers increases, the additional output produced by each additional worker will eventually decline. Therefore, the value of marginal product of labor will also decline.

The Value of Marginal Product of Labor