13. Consider Jamie's production data given in the table to the right. Suppose Jamie has to pay her workers $20 per hour, and further suppose there are no other production costs at all. What is the marginal product of the 5th worker? What Jamie pays workers is irrelevant to answering this question. The Marginal Product (MP) of a worker is just the amount by which the firm's output increases due to hiring that worker. If we examine the table to the right we see that when the firm employees 4 workers Total Output is 40, and when the firm employs 5 workers Total Output is 47. Since output rose by seven units when the 5th worker was hired, the MP of the 5th worker is 7. |
|