If a firm hires 12 workers at $9 per hour each and the 13^th worker will be hired only if the wage rate falls to $8 per hour, the marginal wage rate must be A) -$8. B) $8. C) -$4. D) $4.

Question

Quizplus · Accepted Answer

The marginal wage rate is the change in total wage cost when an additional worker is hired. Here, hiring the 13th worker reduces the wage rate for all workers by $1, resulting in a decrease of $12 for the first 12 workers and an increase of $8 for the 13th worker, totaling a net change of -$4.

If a Firm Hires 12 Workers at $9 Per Hour