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Marginal labour productivity.

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What is the definition of marginal output of labor?

The change in output that results from employing an added unit of labor (hiring 1 extra person).


How can one determine the marginal product of labor in a production process?

To determine the marginal product of labor in a production process, you can calculate the change in output when one additional unit of labor is added. This can be done by dividing the change in output by the change in labor input. The marginal product of labor helps to understand how efficiently labor is contributing to the overall production.


The marginal product of labor can be defined as?

change in output/change in labor.


What does a marginal capacity to work mean?

Marginal capacity to work refers to the additional output or productivity that can be achieved by employing one more unit of labor or resources, while keeping other inputs constant. It reflects the change in total output resulting from a slight increase in work effort or labor. This concept is important in economics as it helps assess the efficiency of labor utilization and informs decisions about hiring or resource allocation. In practical terms, it indicates how much more work can be done with the existing setup before reaching optimal capacity.


What would cause marginal costs to increase?

By definition marginal cost is the change in total costs for each additional item produced. Marginal costs will decrease when changes in inputs result in costs increasing at a decreasing rate. An example might be gains in productivity when hiring an additional unit of labor results in a more than proportional increase in output. Marginal costs would increase when an additional unit of an input results in a less than proportional increase in output (assuming input prices are constant).


Why is it that when a firms marginal revenue product equals the wage rate marginal revenue also equals the marginal cost?

When a firm's marginal revenue product (MRP) equals the wage rate, it indicates that the additional revenue generated by hiring one more unit of labor matches the cost of employing that labor. At this point, the firm maximizes its profit by employing labor up to the point where the cost of additional labor (wage) equals the additional revenue generated (MRP). Consequently, since marginal revenue (MR) from selling output also equals the price in a competitive market, and given that marginal cost (MC) reflects the cost of producing additional output, the condition where MRP equals wage leads to the situation where MR equals MC, ensuring optimal production decisions.


What is the change in output from adding one more worker called?

marginal product of labor


How does a business use marginal analyss to decide how many workers to employ?

A business uses marginal analysis to determine the optimal number of workers by comparing the additional output generated by hiring one more worker (marginal product) to the additional cost of hiring that worker (marginal cost). If the marginal product exceeds the marginal cost, it is beneficial to hire more workers. This process continues until the marginal product equals the marginal cost, ensuring that the business maximizes its efficiency and profitability. Ultimately, this analysis helps the business find the ideal balance between labor costs and production output.


Why is demand for labor curve downward sloping?

I believe in economics we assume that firms are rational and because of this a rational firm would not employ additional labor if it caused a decline in the total output of the firm.


What does labor consumption mean?

hiring workers


What was the contract system of hiring labor?

The way to


Can labor productivity decline as total output is rising?

NO. The labor productivity will rise together with total output. Vice versa