A Level Economics AQA Practice Exam

What does the Marginal Physical Product of Labour refer to?

1. The total revenue of a firm

2. The increase in total output from hiring one additional worker

3. The cost associated with hiring an additional worker

4. The overall productivity of a firm’s labor force

The correct answer is: The increase in total output from hiring one additional worker

The Marginal Physical Product of Labour refers to the increase in total output that results from hiring one additional worker. This concept is vital for understanding how labor inputs contribute to production. When a firm hires another worker, the additional output produced by that worker is the marginal physical product. This metric helps firms determine the productivity and efficiency of labor in the production process, guiding decisions on hiring and resource allocation. Total revenue of a firm pertains to the income received from sales and does not directly relate to the productivity of labor. The cost associated with hiring an additional worker is concerned with expenses rather than output change, while overall productivity of a firm’s labor force illustrates productivity but does not specify the incremental effect of one additional worker. Thus, the focus on the specific contribution of one more worker makes the option about the increase in total output from hiring one additional worker the accurate description of Marginal Physical Product of Labour.