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WAEC Economics 1988 Question 19

Question 19

Labour Market

If a producer sells 1kg of rice for ₦2.00 and his marginal product is 100kg, what is the highest wage he can pay the marginal labourer?

  1. A.₦20.00
  2. B.₦30.00
  3. C.₦50.00
  4. D.₦100.00
  5. E.₦200.00
Show the answer and explanation

Answer: E (₦200.00)

Explanation

The most he can pay is the marginal revenue product: 100kg × ₦2.00 = ₦200.00.