Question

Complete the table by calculating marginal productivity (MP) of labor and average productivity (AP) of labor. Then plot the total product, MP, and AP and explain the relationship between MP and AP. Why does MP first rise and then decline?

Inputs of Labor	Total Production	Marginal Productivity	Average Productivity
0	0
1	15
2	34
3	51
4	65
5	74
6	80
7	83
8	82

Answer 1

inputs of Labour	Total Production	Marginal Productivity	Average Productivity
		`=(Tpi+1 - TPi/(Li+1 - Li)	`=TP/L
0	0	`-	0
1	15	15	15.00
2	34	19	17.00
3	51	17	17.00
4	65	14	16.25
5	74	9	14.80
6	80	6	13.33
7	83	3	11.86
8	82	-1	10.25
Relationship Between MP and AP:
When AP is rising, MP is above it implying that MP increases more than AP.
When AP is falling MP is below AP, implying that MP decraeses more than AP.
The MP and AP are equal when the AP is at its maximum.
MP first rise because given the fixed capital, more labour incraeses output but as the capital is exhausted, engagement of more labour crowds the existing capital and the incrase in output is less than what the previously employed labour could do together.