Why does the marginal product of labor start to decrease after a certain number of workers are hired? What makes the difference? a) The variable input continues to increase while the fixed input is fixed. b) Both the variable and the fixed inputs are increasing at the same rate. is it a or b?
Why does the marginal product of labor start to decrease after a certain number of workers are hired? What makes the difference? a) The variable input continues to increase while the fixed input is fixed. b) Both the variable and the fixed inputs are increasing at the same rate. is it a or b?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Why does the marginal product of labor start to decrease after a certain number of workers are hired? What makes the difference?
a) The variable input continues to increase while the fixed input is fixed.
b) Both the variable and the fixed inputs are increasing at the same rate.
is it a or b?
Transcribed Image Text:Marginal Product 4 Worker
Baxter, Food
Truck Owner
Marginal Product 4 Workers
Generally speaking, it has to do with fixed and variable inputs.
Number of Workers
Number of Lunches
Marginal Product of Labor
1
5
17
12
Rochelle
3
35
18
A fixed input is an input to production that does not change – in
this case your taco truck. No matter how many tacos you cook,
you only use one truck.
4
42
7
40
Rochelle
A variable input is an input to production that can change - in
this case the number of workers you hire. You can vary the
number of workers you hire to change the number of tacos you
make.
Rochelle
Okay, so why does the marginal product of labor start to decrease after
a certain number of workers hired? What makes the difference?
Baxter, Food
Truck Owner
The variable input continues to increase while the fixed input is fixed.
Both the variable and the fixed inputs are increasing at the same rate.
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