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Recently, the Boeing Commercial Airline Group (BCAG) recorded orders for more than 15,000 jetliners and delivered more than 13,000 airplanes. To maintain its output volume, this Boeing division combines efforts of capital and more than 90,000 workers. Suppose the European company, Airbus, enjoys a…
a similar production and produces a similar number of aircrafts with labor costs higher in Europe than in the US. Do you expect Airbus to have same marginal product as airbus as workers at Boeing. Explain The BCAG’S boeing division employs more than 90,000 workers with a relatively lower wage rate than Airbus. The higher wage rate rate in Europe will encourage will encourage the European manufacturing company Airbus that uses an input mix that contains that has more capital and less labor….

s suggests a more capital intensive technology by Airbus. In the production process both Boeing and Airbus will operate in the second stage of production where the marginal product is falling. But as Airbus uses less labor than Boeing, it follows that the marginal it follows that the marginal product of Airbus is higher than Boeing .



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