Question

Labor Units (number of workers) Total Product (cookies produced per hour) Marginal Product of Labor Average...

 Labor Units (number of workers) Total Product (cookies produced per hour) Marginal Product of Labor Average Product of Labor 0 0 --- --- 1 4 2 12 3 24 4 40 16 10 5 60 6 75 7 84 8 86 2

Use the information in the Table above to answer the following questions.

a. Complete the empty cells in the Table [13 points]

b. At what level of employment(number of workers) does diminishing marginal product set in? [3 points]

a)

 Labor Units (number of workers) Total Product (cookies produced per hour) Marginal Product of Labor Average Product of Labor 0 0 --- --- 1 4 4 4 2 12 8 6 3 24 12 8 4 40 16 10 5 60 20 12 6 75 15 12.5 7 84 9 12 8 86 2 10.75

the marginal product of n labor=(total product of n labor - the total product of p labor)/(n-p)............(n>p)

APL=TP/L

b)

at 7th worker

the MPL decreases from 6th to 7th, that shows the diminishing product of labor

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