The table has the marginal products for workers at Bart's Bats, a baseball bat factory.
-Using the above table,suppose the price of a bat is $3.If the wage rate for a worker in a baseball bat manufacturing plant is $18 an hour,then the firm will hire ________ workers; if the wage rate falls to $12 an hour,then the firm will hire ________.
A) 1; 2
B) 2; 4
C) 3; 3
D) 5; 4
E) 3; 5

Question

The table has the marginal products for workers at Bart's Bats, a baseball bat factory.
-Using the above table,suppose the price of a bat is $3.If the wage rate for a worker in a baseball bat manufacturing plant is $18 an hour,then the firm will hire ________ workers; if the wage rate falls to $12 an hour,then the firm will hire ________.
A) 1; 2 
B) 2; 4 
C) 3; 3 
D) 5; 4 
E) 3; 5

Quizplus · Accepted Answer

Given the price of a bat is $3, the firm will hire workers up to the point where the value of the marginal product (VMP) of labor equals the wage rate. Without the table, we can't calculate exact numbers, but we can infer from the question that when the wage rate is $18, the firm hires fewer workers than when the wage rate is $12, because a lower wage rate makes additional workers more affordable relative to the revenue they generate ($3 per bat). The only option that reflects an increase in the number of workers hired as the wage decreases is option E, which suggests the firm hires 3 workers at a wage of $18 an hour and 5 workers at a wage of $12 an hour.

The Table Has the Marginal Products for Workers at Bart's