Suppose that wages in the agricultural and manufacturing sectors are $10 and $20 per hour, respectively, and that the prices of both the agricultural and manufactured good are both $50 per unit. What is the marginal productivity of labor in the manufacturing sector?
A) $1,000
B) 0.4 units per hour
C) 2.5 units per hour
D) $0.40

Question

Quizplus · Accepted Answer

The marginal productivity of labor in the manufacturing sector is calculated by dividing the wage by the price of the good produced. In this case, $20 (wage in manufacturing) divided by $50 (price per unit of manufactured good) equals 0.4 units per hour.

Suppose That Wages in the Agricultural and Manufacturing Sectors Are