Question

Dale and Dana work at a self-service gas station and convenience store. Dale opens up every day, and Dana arrives later to help stock the store. They are both paid the current market wage of $9.50 per hour. But Dale feels he should be paid much more because the revenue generated from the gas pumps he turns on every morning is much higher than the revenue generated by the items that Dana stocks.
Required:
Assess this argument.

Answer 1

Answer is given below :

Explanation:

• Dale argument is wrong, because the business owner hires workers for up to $9.50 per hour, the last person's marginal product. This implies that all other hired workers will have a marginal product value of more than 9.50 per hour, although wages equal to 50 9.50 will be paid.
• Therefore any employee who opens a station, be it Dala or Dana, has more value than a marginal product than any other person who reports for work.