If the marginal physical product (MPP) of one additional unit of labor is 5 units per hour, product price is constant at $6 per unit, and the wage rate is $28 per hour, then: O The additional unit of labor should be employed The additional unit of labor should not be employed because it costs more than it is worth O The employer should lower wages and accept less employment of labor O Product price must be reduced if profits are to be made

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter26: Earnings, Productivity, And The Job Market
Section: Chapter Questions
Problem 10CQ
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If the marginal physical product (MPP) of one additional unit of labor is 5 units per hour, product
price is constant at $6 per unit, and the wage rate is $28 per hour, then:
The additional unit of labor should be employed
The additional unit of labor should not be employed because it costs more than it is worth
The employer should lower wages and accept less employment of labor
Product price must be reduced if profits are to be made
Transcribed Image Text:If the marginal physical product (MPP) of one additional unit of labor is 5 units per hour, product price is constant at $6 per unit, and the wage rate is $28 per hour, then: The additional unit of labor should be employed The additional unit of labor should not be employed because it costs more than it is worth The employer should lower wages and accept less employment of labor Product price must be reduced if profits are to be made
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