Answer the question on the basis of the following information.A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired;32 when two workers are hired;37 when three are hired;and 40 when four are hired.The farmer's product sells for $3 per unit and the wage rate is $13 per worker. Refer to the given information.How many workers should the farmer hire?
A) 1.
B) 2.
C) 3.
D) 4.

Question

Quizplus · Accepted Answer

The marginal product of labor can be found by calculating the change in total product for each additional worker. The marginal products are: 8, 5, and 3. Since the price of the product is $3 and the wage rate is $13, the farmer should hire workers as long as their marginal product is greater than the wage rate. Therefore, the farmer should hire 3 workers since the marginal product of the fourth worker is less than the wage rate.

Answer the Question on the Basis of the Following Information