How Markets Work Unit Test

Question

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Question
Use the table to answer the question.

Number of Workers Output Total Cost ($) Total Revenue ($)
1 40,000 50,000 400,000
2 48,000 100,000 480,000
3 52,000 150,000 520,000
Calculate the marginal product of labor associated with hiring a third worker.

(1 point)
Responses

370,000
370,000

4,000
4,000

40,000
40,000

50,000
50,000
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Answer 1

To calculate the marginal product of labor, you need to determine the change in total output when hiring an additional worker.

For the third worker:
Total output with 2 workers = 48,000
Total output with 3 workers = 52,000

Change in total output = 52,000 - 48,000 = 4,000

Therefore, the marginal product of labor associated with hiring a third worker is 4,000.

Correct response: 4,000