Question

2. Given the production table below: This question holds 9 marks. a. Complete the table above. b. Calculate the quantity that can be produced by 10 workers. c. How many workers needed to produce 34 units? d. Suppose that the company has 7 workers. If the company wants to increase t production by 34 units, how many more workers should hire?

Answer 1

L is labor. TP is total product, AP is average product, MP is marginal product.

A. The filled table is below.

MP 5 10 12 14

Average Product has been calculated by simply dividing the total product by labor.

Marginal product is the increase in production one increase in labor will give us. So to calculate marginal product, we calculate the change in production at each step and also the corresponding change in labor. Then simply divide the change in product from change in labor. For example, as we increase the labor from 3 to 6, our production increases from 9 to 24, an increase of 15. So marginal product=15/3=5.

B. We already know that 9 workers will produce 54 units. We also know that the MP for 12 labors is 14, which means the 10th labor will produce 14 more quantity. Hence, total quantity by 10 workers=54+14=68.

C. It is given that 24 units will be produced by 6 workers. The MP of 9 workers in 10, which means each additional worker after 6 workers will produce 10 more quantity. Hence, it will take 6+1=7 workers to make 34 quantity.

D. The company has 7 workers. We calculated in part C that 7 workers will produce 34. The company wants to increase it by a further 34, which gives a total of 68. In part B we already calculated that it will take 10 workers to make 68 quantity. Hence the answer is 10 workers.