Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
$20
B
$15
C
$5
D
$35
Understanding the Answer
Let's break down why this is correct
Answer
The firm's marginal benefit from hiring an additional worker is based on how much extra output that worker produces compared to what they cost. In this case, the worker produces 20 units of output, which is their marginal product. Since the firm pays the worker $15, the benefit from the 20 units of output must be compared to this cost. If the value of the 20 units produced is greater than $15, then hiring the worker is beneficial for the firm. For example, if these 20 units can be sold for $30, the firm gains a $15 profit from hiring that worker, making it a good decision.
Detailed Explanation
The marginal benefit is the extra output from hiring one more worker. Other options are incorrect because This answer confuses cost with benefit; This answer suggests the benefit is less than the wage.
Key Concepts
marginal product of labor
Topic
Marginal Product and Labor Costs
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.