Jeff owns a garage and has 3 mechanics to help him.With the tools used being fixed in the short run, his production function is given by 5 + 2L = Y , where L is the number of mechanics and Y is the number of cars they can fix.If Jeff hires a fourth mechanic, what will be the marginal product of the new mechanic hired?
A)11
B)13
C)2
D)7

Question

Quizplus · Accepted Answer

The marginal product of labor (MPL) is the increase in output that results from hiring an additional unit of labor, holding all other inputs constant.

To find the MPL of the fourth mechanic, we need to calculate the increase in output when we go from 3 mechanics (L=3) to 4 mechanics (L=4).

Y(L=3) = 5 + 2(3) = 11 cars fixed 
Y(L=4) = 5 + 2(4) = 13 cars fixed

Therefore, the increase in output from hiring the fourth mechanic is:

MPL = Y(L=4) - Y(L=3) = 13 - 11 = 2 cars

So the marginal product of the fourth mechanic hired is 2 cars.

Since we don't have any information on the wage rate or the price of cars, we're not able to determine whether it would be profitable for Jeff to hire the fourth mechanic or not.

Jeff Owns a Garage and Has 3 Mechanics to Help