If the value of marginal product of the 10th worker is $60,then the
A) quantity of labor demanded when the wage rate is $60 will be 10 workers.
B) wage rate of the 10th worker will be $6.
C) firm will not hire the worker if the wage rate is less than $60.
D) marginal cost of the 10th worker will be $6.
E) quantity of labor demanded when the wage rate is $6 will be 10 workers.

Question

Quizplus · Accepted Answer

The value of marginal product of the 10th worker is $60, which means that the additional output produced by hiring the 10th worker is worth $60. Therefore, the firm will hire the 10th worker if the wage rate is less than or equal to $60. If the wage rate is higher than $60, the firm would not hire the 10th worker. Thus, the quantity of labor demanded when the wage rate is $60 will be 10 workers.

If the Value of Marginal Product of the 10th Worker