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Use the information in the table to answer the two questions that follow about Monster's Ink, a tattoo shop. Number of workers Tattoos completed Marginal product 0 1 2 3 4 0 8 18 25 28 30 31 5 6 What is the marginal product of the fourth tattoo artist? marginal product: N/A 8 10 7 2 1 tattoos

Use the information in the table to answer the two questions that follow about Monster's Ink, a tattoo shop. Number of workers Tattoos completed Marginal product 0 1 2 3 4 0 8 18 25 28 30 31 5 6 What is the marginal product of the fourth tattoo artist? marginal product: N/A 8 10 7 2 1 tattoos

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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### Analysis of Labor and Marginal Product at Monster's Ink Tattoo Shop The table provided illustrates the relationship between the number of workers employed at Monster's Ink and the corresponding tattoos completed, along with the calculated marginal product of labor. #### Table Overview | Number of Workers | Tattoos Completed | Marginal Product | |-------------------|-------------------|------------------| | 0 | 0 | N/A | | 1 | 8 | 8 | | 2 | 18 | 10 | | 3 | 25 | 7 | | 4 | 28 | 3 | | 5 | 30 | 2 | | 6 | 31 | 1 | #### Marginal Product Calculation - **Definition**: The marginal product of labor is the additional number of tattoos completed with the addition of one more tattoo artist. - **Question**: What is the marginal product of the fourth tattoo artist? - **Answer**: The marginal product of the fourth tattoo artist is 3 tattoos. #### Economic Reasoning The drop in marginal physical product as more workers are added is a common phenomenon in production known as diminishing returns. Here are the potential explanations provided: 1. **Negative Returns Hypothesis**: Suggests that the shop is experiencing negative returns since the third worker increases output by less than the fourth worker. 2. **Increasing Returns Hypothesis**: Proposes that the total tattoo output increases every time a new worker is hired, implying increasing returns—however, this is not supported by the data. 3. **Diminishing Returns**: Indicates that as more workers are hired, efficiency decreases, possibly due to congestion or the need to share resources like tools (post-sanitization). This aligns with the data showing a decline in marginal product as more workers join. 4. **Lack of Rational Reasoning**: Posits that there's no systematic reason behind the change in output—this is generally unlikely in a structured setting like a tattoo shop. The most plausible explanation, given the data, is the concept of diminishing returns; as more tattoo artists are employed, they have fewer resources per worker, potentially leading to a decrease in efficiency.
Transcribed Image Text:### Analysis of Labor and Marginal Product at Monster's Ink Tattoo Shop The table provided illustrates the relationship between the number of workers employed at Monster's Ink and the corresponding tattoos completed, along with the calculated marginal product of labor. #### Table Overview | Number of Workers | Tattoos Completed | Marginal Product | |-------------------|-------------------|------------------| | 0 | 0 | N/A | | 1 | 8 | 8 | | 2 | 18 | 10 | | 3 | 25 | 7 | | 4 | 28 | 3 | | 5 | 30 | 2 | | 6 | 31 | 1 | #### Marginal Product Calculation - **Definition**: The marginal product of labor is the additional number of tattoos completed with the addition of one more tattoo artist. - **Question**: What is the marginal product of the fourth tattoo artist? - **Answer**: The marginal product of the fourth tattoo artist is 3 tattoos. #### Economic Reasoning The drop in marginal physical product as more workers are added is a common phenomenon in production known as diminishing returns. Here are the potential explanations provided: 1. **Negative Returns Hypothesis**: Suggests that the shop is experiencing negative returns since the third worker increases output by less than the fourth worker. 2. **Increasing Returns Hypothesis**: Proposes that the total tattoo output increases every time a new worker is hired, implying increasing returns—however, this is not supported by the data. 3. **Diminishing Returns**: Indicates that as more workers are hired, efficiency decreases, possibly due to congestion or the need to share resources like tools (post-sanitization). This aligns with the data showing a decline in marginal product as more workers join. 4. **Lack of Rational Reasoning**: Posits that there's no systematic reason behind the change in output—this is generally unlikely in a structured setting like a tattoo shop. The most plausible explanation, given the data, is the concept of diminishing returns; as more tattoo artists are employed, they have fewer resources per worker, potentially leading to a decrease in efficiency.
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