Question

1. Explain why marginal physical product would diminish as

(a) More secretaries are hired in an office.

(b) More professors are hired in the economics department.

(c) More construction workers are hired to build a school.

please answer it by typing

Answer 1

Marginal Physical product is defined as the amount of output change due to one unit change in input. In our case, the only input we are concerned with is labour.

Each worker has increasingly smaller amount of other factors to work with if other factors are fixed.

1) In an office if due to other inputs being fixed , each additional secretary will have lesser work to deal with and thus the MP is diminishing. Also, another case could be the fact that new hires in secretary positions are less skilled or work less hard leading to fall in MP.

2) In the economics department, if the department fails to upgrade the course structure or introduce new areas to teach, each professor will have less amount to teach leading to fall in MP. Again, if the new professors are less skilled or work less hard MP will fall.

3) When a new building is being built, if infrastructural capital is fixed then each labour has less capital to work with leading to MP falling.