Question

Describe and explain the key inputs used in the production process? What is the marginal product of labor?

Answer 1

The key inputs used in the production process are labor and capital.

Labor includes the labor power of the people, who are willing to work. It relates to the labor-force of a country. In return to the labor power offered by an individual for the production of goods and services, the individual is paid wages as return.

Capital includes all the machinery, equipment and other mechanical tools that are used in combination with the labor for the production of goods and services.

Marginal product of labor is the addition to the total product when labor unit is increased marginally or usually by one unit.