Question

Question 2
The following table presents data on the output produced at different levels of labour
inputs.
Labour input (workers per week) Output (goods per week) Marginal productof labour (MPL) Average product oflabour (APL)
0 0
1 350
2   800
3 1220
4 1560
5 1770
6 1800
i) Calculate the marginal product of labour (MPL) and the average product of labour
(APL) to complete the table and then show the respective curves.
ii) What is the level of labour input when the law of diminishing returns begins to
operate? (1 mark)

Answer 1

Answer

i) Marginal Product of labor(MPL) = Change in output / Increase of an additional unit of worker

Average Product of labor(APL) = Output level / Number of worker producing that output level

After calculating the MPL and APL , the final table is shown below-

Labor input(workers per week)	Output(goods per week)	Marginal Product of labor(MPL)	Average Product of labor(APL)
0	0	-	-
1	350	350	350
2	800	450	400
3	1220	420	406.67
4	1560	340	390
5	1770	210	354
6	1800	30	300

The respective curves are shown in the following figure.

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ii) 3

From 3 units of worker, the law of diminishing returns begins.

Labor input(workers per week)	Output(goods per week)	Marginal Product of labor(MPL)	Average Product of labor(APL)
0	0	-	-
1	350	350	350
2	800	450	400
3	1220	420	406.67
4	1560	340	390
5	1770	210	354
6	1800	30	300

From the above table, we see that, the MPL rises till the number of two units of worker. When the number of workers is 3, we see that the MPL starts to decrease. Thus, lthe law of diminishing returns begins when the level of labour input is 3.

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