A firm has a single wage rate.At present 10 workers are employed at $50 per day.Wages are raised to $55 per day to attract an extra worker.The marginal labor cost per day is:
A) $5.
B) $10.
C) $55.
D) $105.
The 11th worker costs $55,but all 10 other workers require a $5 increase in wage.Thus,the total increase is $105.

Question

Quizplus · Accepted Answer

The marginal labor cost is the additional cost of hiring one more worker. The 11th worker costs $55, and the wage increase for the existing 10 workers is $5 each, totaling $50. Therefore, the total increase in cost is $105.

A Firm Has a Single Wage Rate