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The marginal product of labor

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Does the marginal product of labor measure how output changes as the wage rate changes, or is it the average product of labor divided by the quantity of capital stock and can it be negative or is it any two of the above? If so which ones? If a company is using a single variable input (labor) and a given amount of a single fixed input (capital) and the level of capital decreases will the total product curve of labor, Average product of labor, or marginal product of labor shift downward or all of the above or none of the above? Also, if a company increases its usage of all inputs by 100% and output increases by less than 100%, is the company's production function exhibiting a decreasing returns to scale, diminishing marginal returns, decreasing marginal rate of technical substitution or any two of the mentioned? If so, which ones?

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The marginal product of labor measures how output changes as the number of labourers changes, which in turn might depend on how the wage rate changes. If a company is ...

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The marginal product of labor is defined.

See Also This Related BrainMass Solution

Labor, capital, & inputs & outputs

This is a 4 part question:

A manufacturer is hiring 20 units of labor and 6 units of capital (bundleA). The price of labor is $10 and the price of capital is $2 and at A the marginal products of labor and capital are both equal to 20.

1.Beginning at A if the manufacturer increases labor by 1 unit and decreases capital by 1 unit, what will happen to cost and output?

Cost remain constant & output rises by 20 units
Cost remain constant & output lowers by 20 units
Output remains constant & cost increase by $8
Output remains constant & cost lowers by $8
Both cost and output remain constant

2.Beginning at A, if the manufacturer raises expenses on labor by $1 and lowers expenses on capital by $1, which is True?

Output per $ spent will rise
Output per $ spent will lower
MP of labor will eventually rise and MP of capital will eventually fall
MP of labor will eventually rise and MP of capital will remain constant
Or none of these

3.The manufacturer

is using optimal combination of capital and labor
should use more labor and less capital
should use more capital and less labor
need more information to determine

4.In equilibrium

MPL will be less than 20
MPK will be more than 20
MPL will be 5 times MPK
Or the first 2 listed above

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