(a) Why is the marginal product of labour likely to increase initially in the sh
ID: 1150996 • Letter: #
Question
(a) Why is the marginal product of labour likely to increase initially in the short run as more labour is hired? Why does production eventually experience diminishing marginal product to labour in the short run? (b) If the short run total product curve is a straight line through the origin, what do average and marginal product of labour curves look like? What principle would lead you to expect that total product curve would never have this shape? Explain. (c) Consider the problem you face as a student studying for an exam by modelling yourself as a "producer of an exam score" between 0 and 100. Suppose that marginal payoff to studying initially increases but the marginal payoff eventually declines as you study more. Using a graph, illustrate your production function and show the point at which marginal products starts to declineExplanation / Answer
a). The marginal product of labor is likely to increase in the short run because over time, as workers gain experience and they specialize in their work, their productivity increases, thereby increasing the total amount of output produced. Eventually, when there is no more scope for specialization, any additional working hours put in by the labors lead to reduced output for every additional hour.
b). If total product curve is a straight line passing the origin, then average and marginal product curves will overlap or coincide with each other, both average product and marginal products are constant in this case. We can say so because the slope of the total product curve at each point determines the shape of the marginal product curve, and since the slope of the average product curve remains a constant throughout, even the marginal product will remain constant throughout,
c).
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