The table below shows how the total physical product of labour (TPPLTPP_LTPPL) per day changes as more workers are employed by a price-taking firm producing organic honey:
| Number of workers (LLL) | Total Physical Product (TPPLTPP_LTPPL, jars of honey) |
|---|---|
| 0 | 0 |
| 1 | 40 |
| 2 | 75 |
| 3 | 102 |
| 4 | 122 |
| 5 | 135 |
The market price of honey is £4.00\text{\pounds}4.00£4.00 per jar, and the market wage rate for honey-harvesting workers is £100\text{\pounds}100£100 per day.
According to marginal productivity theory, how many workers should the firm employ to maximize its daily profit?
2 workers
3 workers
4 workers
5 workers
64 exam-style questions on AQA A Level Economics 1.6 The labour market (A-level only), covering 1.6.1 The demand for labour, marginal productivity theory, 1.6.2 Influences upon the supply of labour to different markets, 1.6.3 The determination of relative wage rates and levels of employment in perfectly competitive labour markets, 1.6.4 The determination of relative wage rates and levels of employment in imperfectly competitive labour markets, 1.6.5 The Influence of trade unions in determining wages and levels of employment, 1.6.6 The National Minimum Wage, and 1.6.7 Discrimination in the labour market. Each one has a worked solution and a mark scheme showing where the marks go.