Question

Suppose a firm currently produces 325 units of output per day with 15 workers. The firm is able to produce 340 units of output with a 16th worker. What is the marginal product of the 16th worker? a. 10 units of output b. 15 units of output c. 16 units of output d. 25 units of output

Answer 1

Option (b) is correct.

Step-by-step explanation:

Given that,

With 15 workers, output produced per day = 325 units

With 16 workers, output produced per day = 340 units

Marginal product of labor refers to the additional output produce by the employment of an additional labor into the production of a good. It is also defined as the change in the level of output by employing an additional unit of labor.

Therefore, the the marginal product of the 16th worker is the difference between the output produced by the 16 workers and output produced by the 15 workers. It is calculated as follows:

= Output produced per day by 16 workers - Output produced per day by 15 workers

= 340 units - 325 units

= 15 units of output.