A soda factory employs seven workers and produces 500 bottles of soda a day.The company reduces the workforce to six workers and output is now 450 bottles a day.The seventh worker:

Question

Quizplus · Accepted Answer

A) The marginal product of the seventh worker can be calculated as the difference between the output with all seven workers and the output with six workers: 
Marginal Product = 500 - 450 = 50 bottles 
B) The average product is total output divided by the number of workers. With seven workers, the average product is 500/7 = 71.43 bottles per worker. With six workers, the average product is 450/6 = 75 bottles per worker. Therefore, the reduction of the workforce caused the average product to fall. 
C) If the output fell when the seventh worker was removed, it means that their marginal product was higher than the average product of the other six workers. Therefore, the seventh worker had a higher marginal product than the sixth worker. 
So, all options are true, and the answer is D.

A Soda Factory Employs Seven Workers and Produces 500 Bottles