Consider labour that is hired for $18 per hour.If the last hour hired produces 8 units of output which sells for $2 per unit,________ labour should be hired in this situation since the wage is ________ MRP.
A)more; greater than
B)more; less than
C)less; greater than
D)less; less than
E)no; equal to

Question

Quizplus · Accepted Answer

The wage ($18) is greater than the marginal revenue product (MRP) of labor, which is $16 (8 units * $2 per unit), indicating that less labor should be hired.

Consider Labour That Is Hired for $18 Per Hour