Question

What is the change in output from adding one more worker called?

Answer 1

The change in output from adding one more worker called "marginal product of labor".

Option: A

Explanation:

The shift in output resulting from adding another worker is called marginal production. This works equally for marginal costs and marginal income. It is a measurement of the impact one more unit would have. In principle, because introducing one more worker increases production, you might keep adding employees.

If introducing a new worker comes at a time that hurts efficiency and production, you would NOT add that employee. It is multiplied by the value of the generated objects. The marginal value of labor is useful for directing hiring decisions, since the increased income must surpass the salaries of the employees concerned.