The questions below deal with the Widget Company, which produces widgets according to the following table.

-The marginal product of the second widget worker hired is
A) 2.
B) 8.
C) 10.
D) 12.

Question

The questions below deal with the Widget Company, which produces widgets according to the following table.
 
-The marginal product of the second widget worker hired is
A) 2. 
B) 8. 
C) 10. 
D) 12.

Quizplus · Accepted Answer

The marginal product of each worker is the additional output produced by that worker. In this case, the marginal product of the second worker is the difference between the total output with two workers and the total output with only one worker, which is 20 – 10 = 10. Therefore, C is the correct answer.

As for the best choice(s), it depends on the company's goals and constraints. If the goal is to maximize output, then hiring more workers until the marginal product of each worker becomes zero or negative (i.e. diminishing returns) would be optimal. However, if the goal is to minimize cost, then hiring only the number of workers necessary to produce the desired level of output would be optimal. This might involve using the marginal product of labor to determine the most efficient number of workers, depending on the wage rate and other costs of production.

The Questions Below Deal with the Widget Company, Which Produces