Number of workers (per hour) total output(per hour) marginal physical product (output per worker) total revenue(dollars per hour) marginal revenue product (output per worker)

1 4 ...... ______ ........

2 10 ______ ______ ______

3 15 ______ ______ ______

4 19 ______ ______ ______

5 22 ______ ______ ______

Table $30.1$ Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.1, the contribution to total revenue of the fourth worker hired is A) $76 per hour. B) $16 per hour. C) $4 per hour. D) $12 per hour.

Question

Number of workers (per hour)	total output(per hour)	marginal physical product (output per worker)	total revenue(dollars per hour)	marginal revenue product (output per worker)
1	4	......	______	........
2	10	______	______	______
3	15	______	______	______
4	19	______	______	______
5	22	______	______	______

Table $30.1$ Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.1, the contribution to total revenue of the fourth worker hired is A) $76 per hour. B) $16 per hour. C) $4 per hour. D) $12 per hour.

Quizplus · Accepted Answer

As per the given information, the product price is $4 per unit and the hourly wage for workers is $12. Therefore, the marginal revenue product (MRP) of the fourth worker can be calculated as follows:

MRP = Change in total revenue / Change in the number of workers

Since each worker can produce 25 units per hour, the fourth worker will produce an additional 25 units, resulting in an increase in total revenue by $100 ($4 per unit x 25 units). Therefore, MRP of the fourth worker is:

MRP = $100 / 1 = $100

However, the worker is paid an hourly wage of $12. Therefore, the contribution of the fourth worker to total revenue is the difference between MRP and the hourly wage, which is:

Contribution to total revenue = MRP - Hourly wage
= $100 - $12
= $88 per hour

Therefore, the contribution to total revenue of the fourth worker hired is $88 per hour, which is closest to Option B ($16 per hour).