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1
Number of Workers
Units of Output
2
100
3
160
4
210
5
250
6
280
7
300
8
310
1
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4. Refer to Table 1 above. The marginal product of the
3rd unit of labor is:
a) 30
b) 53.33
c) 60
d) 160
ANSWER______________
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5. Refer to Table 1 above. If the price of output is $2 per
unit, the marginal revenue product of the 4th unit
of
labor is:
a) $50
b) $52.5
c) $100
ANSWER______________
Number of Workers
Units of Output
2
100
3
160
4
210
5
250
6
280
7
300
8
310
Explanation / Answer
In economics, the marginal product of labor (MPL) is the change in output that results from employing an added unit of labor.An increase in the marginal product of labor means that more units can be produced in the same time as before. This decreases marginal cost (less man hours went into those items). This reasoning rules out options a and b. I don't see how d could be true, since a rise in marginal product of labor cannot correlate with a fall in average product of labor............................................Definition of 'Marginal Revenue Product - MRP' The change in revenue that results from the addition of one extra unit when all other factors are kept equal. The marginal revenue product is used in marginal analysis to examine the effect of variable inputs, such as labor, and follows the law of diminishing marginal returns. As the number of units of a variable input increase, the revenue generated by each addition unit decreases at a certain point. It is calculated by taking the marginal product of labor and multiplying it by the marginal revenue of a firm The marginal revenue product is different than the marginal product in that it is not a measure of quantity but a measure of revenue. The MRP is often used to calculate the affect of adding employees, as companies want to add employees up to the point at which additional labor won't bring in enough revenue to cover costs.
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