Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table.
$$\begin{array} { | c | c | }
\hline \text { Warkers } & \text { Puges/huur } \
\hline 0 & 0 \
\hline 1 & 40 \
\hline 2 & 75 \
\hline 3 & 105 \
\hline 4 & 125 \
\hline 5 & 140 \
\hline 6 & 150 \
\hline 7 & 155 \
\hline
\end{array}$$
If the market price of each page is $5, the first worker's VMP is ________ per hour, and the third worker's VMP is ________ per hour.

Question

Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table.  
$$\begin{array} { | c | c | } 
\hline \text { Warkers } & \text { Puges/huur } \
\hline 0 & 0 \
\hline 1 & 40 \
\hline 2 & 75 \
\hline 3 & 105 \
\hline 4 & 125 \
\hline 5 & 140 \
\hline 6 & 150 \
\hline 7 & 155 \
\hline
\end{array}$$  
If the market price of each page is $5, the first worker's VMP is ________ per hour, and the third worker's VMP is ________ per hour.

Quizplus · Accepted Answer

The first worker's VMP (Value of Marginal Product) is calculated by multiplying the marginal product of the first worker by the market price of each page. The first worker produces 40 pages per hour, so their VMP is 40 pages/hour * $5/page = $200. The third worker's marginal product is the difference in output between the third and second workers, which is 105 pages - 75 pages = 30 pages. Thus, the third worker's VMP is 30 pages/hour * $5/page = $150.

Paper Pushers Inc If the Market Price of Each Page Is $5, the Apart