Question

Quantity of Labor Total Product Total Revenue
1 4 $16
2 8 32
3 11 44
4 13 52
5 14 56

Refer to the given data. The marginal revenue product of the second worker is:_______

a. $16.
b. $8.
c. $32.
d. $4.

Answer 1

Answer:

The marginal revenue product of the second worker is:_______

a. $16.

Explanation:

a) Data and Calculations:

Quantity of Labor   Total Product   Total Revenue   Marginal Revenue

1                                     4                            $16              $16

2                                    8                             32              $16

3                                    11                            44               $12

4                                    13                           52               $8

5                                    14                           56              $4

b) The Marginal Revenue of labor refers to the additional revenue that is derived when one additional unit of labor is employed into production. It can be calculated by deducting the total revenue obtained by the addition of one unit of labor to the total revenue before the addition.