Daryn is raking leaves to earn money for his university's economics club. In the first hour, he rakes 8 bags of leaves. In the second hour, he rakes 6 bags of leaves. If he earns $8 per hour, the value of the marginal product of the second hour of labor is $16.

Question

Quizplus · Accepted Answer

The value of the marginal product of labor is calculated by multiplying the marginal product of labor (the additional output produced by an additional unit of labor) by the price of the output. In this case, the marginal product of the second hour is the difference in the number of bags raked between the first and second hours (6 bags in the second hour compared to 8 in the first, so the marginal product is -2 bags, but for the purpose of calculating value, we focus on the 6 bags produced in the second hour). Since he earns $8 per hour regardless of the number of bags raked, the value of the marginal product for the second hour is actually $8 (his hourly wage), not $16. The calculation of $16 seems to misunderstand the concept, as it possibly incorrectly doubles his hourly wage rather than considering the actual earnings or output value for that hour.

Daryn Is Raking Leaves to Earn Money for His University's