Table 18-2
The following table shows the production function for a particular business.The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis.

-Refer to Table 18-2.Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day.What is the value of the marginal product of labor for the second worker?

Question

Table 18-2
The following table shows the production function for a particular business.The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis.
 
-Refer to Table 18-2.Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day.What is the value of the marginal product of labor for the second worker?

Quizplus · Accepted Answer

The value of the marginal product of labor (VMPL) is calculated by multiplying the marginal product of labor (additional output from hiring one more worker) by the price of the output. Assuming the second worker increases output by 60 units, VMPL = 60 units * $5/unit = $300.

Table 18-2 The Following Table Shows the Production Function for a Particular