$$\begin{array}{l}
\begin{array} { | c | c | }
\hline \text { Units of Labor } & \text { Units of Output } \
\hline 0 & 0 \
\hline 1 & 15 \
\hline 2 & 35 \
\hline 3 & 45 \
\hline 4 & 52 \
\hline
\end{array}\
\text { Table 21.1 }
\end{array}$$ If workers are paid $10, what is the labor cost per unit of output in Table 21.1 when output is increased from 15 to 35 units of output?
A) $0.28 per unit.
B) $0.50 per unit.
C) $10 per unit.
D) $20 per unit.

Question

$$\begin{array}{l}
\begin{array} { | c | c | } 
\hline \text { Units of Labor } & \text { Units of Output } \
\hline 0 & 0 \
\hline 1 & 15 \
\hline 2 & 35 \
\hline 3 & 45 \
\hline 4 & 52 \
\hline
\end{array}\
\text { Table 21.1 }
\end{array}$$ If workers are paid $10, what is the labor cost per unit of output in Table 21.1 when output is increased from 15 to 35 units of output?
A) $0.28 per unit.
B) $0.50 per unit.
C) $10 per unit.
D) $20 per unit.

Quizplus · Accepted Answer

To calculate the labor cost per unit of output, we need to determine the total labor cost for producing each unit of output.

When output is 15 units, the total labor cost is $150 (15 units x $10 per unit).

When output is 35 units, the total labor cost is $350 (35 units x $10 per unit).

To determine the labor cost per unit of output for the increased output level, we subtract the total labor cost at 15 units from the total labor cost at 35 units, and then divide by the change in output:

($350 - $150) / (35 units - 15 units) = $200 / 20 units = $10 per unit

Therefore, the labor cost per unit of output is $10 per unit.

The best choice is B, as it is the closest answer to the correct answer of $0.50 per unit.

If Workers Are Paid $10, What Is the Labor Cost