The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital.When answering the questions,you are to assume that the wage per unit of labour is $25 and the cost of the capital is $100.
TABLE 7-4
-Refer to Table 7-4.The marginal product of labour is at its maximum when the firm changes the amount of labour hired from
A)0 to 1 unit.
B)1 to 2 units.
C)2 to 3 units.
D)3 to 4 units.
E)4 to 5 units.

Question

The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital.When answering the questions,you are to assume that the wage per unit of labour is $25 and the cost of the capital is $100.
  TABLE 7-4
-Refer to Table 7-4.The marginal product of labour is at its maximum when the firm changes the amount of labour hired from
A)0 to 1 unit. 
B)1 to 2 units. 
C)2 to 3 units. 
D)3 to 4 units. 
E)4 to 5 units.

Quizplus · Accepted Answer

The marginal product of labor is at its maximum when the increase in output from hiring an additional unit of labor is the greatest. This typically occurs at the point where the marginal product starts to decrease after initially increasing.

The Following Data Show the Total Output for a Firm