Question

Use the following table to answer the following questions: ON + Workers Output 0 300 450 550 600 MPL -- 300 150 100 C6 VMPL Wage -- -- $900 $400 D4 $400 $300 $400 D 6 $400 Gain/Loss -- F3 $50 F5 $-250

What is the value that belongs in cell D4?
a) $500
b) $150
c) $300
d) $450
e) $600

Answer 1

d) $450

Step-by-step explanation:

Workers Output MPL VMPL Wage Gain/Loss

0 0 -- -- -- --

1 300 300 $900 $400 F3

2 450 150 D4 $400 $50

3 550 100 $300 $400 F5

4 600 C6 D6 $400 $-250

What is the value that belongs in cell D4?

VMPL = P * MPL

VMPL = 3 * 150

VMPL = $450

Price = 3 can be found out from worker 1 where VMPL = MPL * Price thus Price = VMPL / MPL