Table 13-4
Gallo Cork Factory

-Refer to Table 13-4.Assume Gallo's currently employs 2 workers.What is the marginal product of labor when Gallo's adds a 3rd worker?

Question

Table 13-4
Gallo Cork Factory
 
-Refer to Table 13-4.Assume Gallo's currently employs 2 workers.What is the marginal product of labor when Gallo's adds a 3rd worker?

Quizplus · Accepted Answer

The marginal product of labor is the change in output resulting from a one-unit increase in labor input while holding all other inputs constant. When Gallo's adds a 3rd worker, the total output increases from 40 to 50 corks per hour. Therefore, the marginal product of labor is (50-40) / (3-2) = 10 corks per hour. Adding a 3rd worker would increase the firm's output by 10 corks per hour, making it the best choice.

Table 13-4 Gallo Cork Factory