Question

19. Computing labor productivity and its relationship to the demand for labor 

Gopher Excavators produces shovels in a small factory and sells the shovels in a competitive market. The following table shows the company's production function: 

Labor (Number of workers)	Output (Shovels)
0	0
1	95
2	185
3	260
4	320
5	355

Use the blue points (circle symbol) to plot the production function for Gopher Excavators on the following graph, 

Calculate the marginal product of labor (MPL) of each worker, and then plot the MPL curve on the following graph using the blue points (circle symbol). 

Note: Remember to plot each point halfway between two integers. For example, when the number of workers increases from 0 to 1, the MPL of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. 

The following graph shows the demand for labor for three different prices per shovel:

 Given the company's marginal product of labor curve shown on the second graph, line _______ on this graph shows Gopher's demand for labor when the price of a shovel is $1.00, and line _______ shows Gopher's demand for labor when the price of a shovel is $1.50.

Answer 1

Answer 2

MPL Casor autput go o - Ngon 75 320 € 355 demand wwe line N is the when buis=1 line uni M when Price =1.50 o when Price =0.50

Answer 3

Table for Production Function graph: 

Labor	Output
0	0
1	95
2	185
3	260
4	320
5	355

Table for Marginal Product of Labor (MLP):

Labor	MLP
0.5	95
1.5	90
2.5	75
3.5	60
4.5	35

Given the company's marginal product of labor curve shown on the second graph, line N on this graph shoes Gopher's demand for labor when the price of a shovel is $1.00, and line O shows Gopher's demand for labor when the price of a shovel is $1.50.