Assume that a firm hires an additional employee. If the marginal product for that employee is greater than for the previous employee hired, it must be thatGroup of answer choicesall workers are not paid the same wage.the workers all perform the exact same set of tasks.all workers are paid the same wage.there are gains from specialization.the marginal product of labor is diminishing.
Question
Assume that a firm hires an additional employee. If the marginal product for that employee is greater than for the previous employee hired, it must be thatGroup of answer choicesall workers are not paid the same wage.the workers all perform the exact same set of tasks.all workers are paid the same wage.there are gains from specialization.the marginal product of labor is diminishing.
Solution
The correct answer is "there are gains from specialization."
Here's why:
-
The marginal product of labor is the additional output a firm gets from hiring an additional worker.
-
If the marginal product for the new employee is greater than for the previous one, it means the new employee is producing more than the previous one.
-
This could be due to a variety of reasons, but one possible explanation is that there are gains from specialization.
-
Specialization refers to the scenario where workers focus on performing a specific task or a small range of tasks.
-
When workers specialize, they often become more efficient and productive at their specific tasks because they gain expertise and experience in that area.
-
Therefore, if the new employee is specialized in a certain task, they might be able to produce more output than the previous employee, leading to a higher marginal product.
-
This doesn't necessarily have anything to do with how much the workers are paid or whether they all perform the exact same tasks.
-
Also, the fact that the marginal product for the new employee is greater than for the previous one contradicts the idea that the marginal product of labor is diminishing.
So, the best answer is that there are gains from specialization.
Similar Questions
Firms will hire additional workers as long as the wage:Group of answer choicesis greater than the marginal product of labouris less than the marginal product of labourequals the marginal product of labouris less than the value of the marginal product of labour
If there are gains from specialization in a workplace, hiring another employee means that the marginal product of labor willGroup of answer choicesbe zero.decrease.increase.be negative.remain the same.
f a business owner can produce more as a whole with an additional worker even if the marginal product associated with that worker is lower than the marginal product associated with the previous worker, then there are:Multiple choice question.increasing marginal returns.diminishing marginal returns.zero marginal returns.negative marginal returns.
If a firm hires another worker and her marginal product of labor is negative, we know that the firm’s total output isGroup of answer choicesincreasing.unchanged.equal to the marginal product of that worker.zero.decreasing.
Your enterprising uncle opens a sandwich shop that employs seven people.The employees are paid $32 per hour and a sandwich sells for $8. If the market for sandwiches is competitive, and your uncle is maximising his profit: a) What is the value of the marginal product of the last worker he hired? b) What is that worker's marginal product? c) Suppose that your uncle purchases a new machine that increases the marginal product of each worker. How will this affect the number of workers that he hires? Explain.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.