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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Retune to Table 7.2. In the top half of the table, at what point does diminishing marginal productivity kick in? What about in the bottom half of the table? How do you explain this?

Chapter 7, Problem 36CTQ, Retune to Table 7.2. In the top half of the table, at what point does diminishing marginal

To determine

With the given table ,Find out at what point does Diminishing marginal productivity kick in? What happens in the lower half of table.

Explanation

Given

LUMBERJACKS 1 2 3 4 5
TREES(TP) 4 10 12 13 13
MP 4 6 2 1 0

from the above table , we can understands from 1 to 5 workers are employed to cut the trees. first labor cuts 4 trees , the two labor cut 10 the marginal product is 10-4/2-1=6. Three workers cut 12 trees so MP becomes 12-10/3-2=2 .After it employing more workers decreases the marginal product to 1 and 0...

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