The value of the marginal product of labor is calculated by multiplying the
a. price of output by the quantity of labor.
b. price of output by the marginal product of labor.
c. wage by the quantity of labor.
d. wage by the marginal product of labor.
b
You might also like to view...
In the classical model, government purchases or tax cuts are appropriate policies to raise GDP
a. True b. False
Suppose that you are given a cost function c(w,r,x)=2w1/2r1/2x3/2 where w is the wage rate for labor, r is the rental rate of capital and x is the output level. a. Does the production process that gives rise to this cost function have increasing, decreasing or constant returns to scale? b. Derive the marginal cost function. c. Calculate the supply function for the firm - i.e. the function that tells us for every combination of input and output prices, how much the firm will optimally produce. How does output by the firm change as input and output prices change? d. If the cost function had been c(w,r,x)=2w1/2r1/2x1/2 instead, how would your answer to (c) change? How can that make any sense?
What will be an ideal response?