Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week.
-Refer to Figure 18-1. Suppose the firm sells its output for $12 per unit, and it pays each of its workers $700 per week. The value of the marginal product of the fifth worker is
A)$540
B)$700
C)$720
D)$1,080

Question

Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week. 
-Refer to Figure 18-1. Suppose the firm sells its output for $12 per unit, and it pays each of its workers $700 per week. The value of the marginal product of the fifth worker is
A)$540 
B)$700 
C)$720 
D)$1,080

Quizplus · Accepted Answer

The value of the marginal product of the fifth worker is $540. This is because the firm's total revenue increases by $1,080 when it hires the fifth worker, and the firm's total costs increase by $700 when it hires the fifth worker. Therefore, the value of the marginal product of the fifth worker is $1,080 - $700 = $540.

Figure 18-1 on the Graph, L Represents the Quantity of Labor and Labor