Recently, the Boeing Commercial Airline Group (BCAG) recorded orders for more than 15,000 jetliners and delivered more than 13,000 airplanes. To maintain its output volume, this Boeing division combined efforts of capital and more than 90,000 workers. Suppose the European company Airbus enjoys a similar production technology and produces a similar number of aircraft but that labor costs (including fringe benefits) are higher in Europe than in the United States. Please explain whether workers at Airbus have the same marginal product as workers at Boeing?

Recently, the Boeing Commercial Airline Group (BCAG) recorded orders for more than 15,000 jetliners and delivered more than 13,000 airplanes. To maintain its output volume, this Boeing division combined efforts of capital and more than 90,000 workers. Suppose the European company Airbus enjoys a similar production technology and produces a similar number of aircraft but that labor costs (including fringe benefits) are higher in Europe than in the United States. Please explain whether workers at Airbus have the same marginal product as workers at Boeing?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.12P

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The Boeing Commercial Airline Group (BCAG) recently recorded orders for more than 15,000 jetliners and delivered more than 13,000 airplanes. To maintain its output volume, this Boeing division combined efforts of capital and more than 90,000 workers. Suppose the European company Airbus enjoys a similar production technology and produces a similar number of aircraft but that labor costs (including fringe benefits) are higher in Europe than in the United States. Would you expect workers at Airbus to have the same marginal product as workers at Boeing?
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