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Question
Microeconomics
Posted 6 months ago

The table below shows the output associated with different amounts of labor for the firm Dave's Stampalooza, Inc.
\begin{tabular}{ll} 
Units of labor & Output (quantity of rubber stamps) \\
\hline 0 & 0 \\
5 & 1175 \\
10 & 1250 \\
15 & 1300 \\
20 & 1350 \\
25 & 1380 \\
30 & 1400
\end{tabular}

What is the marginal product of labor (MPL)\left(M P_{L}\right) for the 25th 25^{\text {th }} unit of labor?

Choose 1 answer:
A) 6 rubber stamps
(B) This cannot be determined using this data
(C) 4 rubber stamps
(D) 55.2
(E) 25
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Answer from Sia
Posted 6 months ago
Solution
a
Definition of Marginal Product of Labor (MPL): The marginal product of labor is the additional output produced by employing one more unit of labor. It is calculated as the change in total output divided by the change in the number of units of labor
b
Calculation of MPL for the 25th unit of labor: To find the MPL for the 25th unit of labor, we need to look at the change in output when labor increases from 20 to 25 units. The output at 20 units of labor is 1350, and the output at 25 units of labor is 1380. The change in output is 13801350=301380 - 1350 = 30 rubber stamps. The change in labor is 2520=525 - 20 = 5 units. Therefore, the MPL is 305=6\frac{30}{5} = 6 rubber stamps
Answer
A: 6 rubber stamps
Key Concept
Marginal Product of Labor (MPL)
Explanation
The marginal product of labor is calculated by dividing the change in output by the change in labor. For the 25th unit of labor, the change in output is 30 rubber stamps and the change in labor is 5 units, resulting in an MPL of 6 rubber stamps.

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