Micro Unit 5, Question 8- Hiring Workers

The video tutorial explains how to calculate the marginal product, which is the additional output from each additional worker. It then introduces the concept of marginal revenue product, which is the additional revenue generated by each worker. The tutorial guides on making hiring decisions based on these calculations, considering the marginal resource cost. Finally, it demonstrates how to calculate profit by subtracting total costs from total revenue, including fixed and variable costs, to determine if hiring workers is profitable.

What is the marginal product of the third worker?

• 5

• 2

• 10

• 15

Why would a firm not hire a worker with a negative marginal product?

• Because it has no effect on total output

• Because it increases costs

• Because it decreases total output

• Because it increases total output

What is the marginal revenue product of the second worker?

• $30

• $20

• $4

• $10

If the wage is $5, should a firm hire a worker who generates $4 in additional revenue?

• Yes, because the revenue is greater than the cost

• No, because it decreases total revenue

• Yes, because it increases total revenue

• No, because the cost is greater than the revenue

What is the total profit when hiring three workers, given a fixed cost of $50 and a total revenue of $60?

• $5

• $0

• -$5

• $10