The only variable cost of production faced by Scrub-It-Clean is labour. All of t
ID: 1163826 • Letter: T
Question
The only variable cost of production faced by Scrub-It-Clean is labour. All of the cleaning materials (detergent etc) are supplied by the school by whom they are employed (to keep the exercise simple assume the schools get the cleaning products from the Education Department free of charge). Table 1 shows the total number of classrooms Scrub-It-Clean can clean with different numbers of employees. explain what happens to marginal product and average productivity as Scrub-It-Clean employs more staff. What is the economic law which explains this relationship?Assume Scrub-It-Clean pays each of its employees $20 a day in wages. Complete Table 2.What happens to average labour costs as output rises in the short-run? Why does this come about?
TABLE 1 Total output and marginal product (Note: marginal returns and marginal physical product are the same concept as marginal product.)
Variable
DATA
Number of employees
1
2
3
4
5
6
7
Total output (Q)
(Classrooms per day)
10
20
30
40
48
54
58
Marginal product
(Addition to total output Q)
No fill
Average productivity
(Total output divided by number of employees)
Variable
DATA
Number of employees
1
2
3
4
5
6
7
Total output (Q)
(Classrooms per day)
10
20
30
40
48
54
58
Marginal product
(Addition to total output Q)
No fill
Average productivity
(Total output divided by number of employees)
Explanation / Answer
Marginal Producr=Change in output/Per Unit of Labor added
Average Product=Output/Labor
Variable Number of Employees 1 2 3 4 5 6 7 Total Output 10 20 30 40 48 54 58 Marginal Product Blank 10 10 10 8 6 4 Average Productivity 10.00 10.00 10.00 10.00 9.60 9.00 8.29Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.