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DustyDevil Company has an assembly line of the fixed size capital
DustyDevil Company has an assembly line of the fixed size capital. Total output is a function of the number of workers (crew size) as shown in the following schedule:
| Crew Size (No. of workers) | Total Output (No. of units) |
|---|---|
| 0 | 0 |
| 1 | 10 |
| 2 | 35 |
| 3 | 50 |
| 4 | 56 |
| 5 | 59 |
| 6 | 60 |
| 7 | 60 |
| 8 | 58 |
Determine the following schedules to complete the table (crew size from 0 to 8) with the following columns:
(a) marginal productivity of labor
(b) average productivity of labor
(c) elasticity of production with respect to labor
Expert Solution
Following table shows marginal productivity, average productivity of labor and elasticity of production with respect to labor respectively.
| Crew size | Total output | Average productivity of labor | Marginal productivity of labor | Elasticity of production with respect to labor |
| 0 | 0 | -- | -- | -- |
| 1 | 10 | 10 | 10 | -- |
| 2 | 35 | 17.5 | 25 | 2.5 |
| 3 | 50 | 16.67 | 15 | 0.85 |
| 4 | 56 | 14 | 6 | 0.36 |
| 5 | 59 | 11.8 | 3 | 0.21 |
| 6 | 60 | 10 | 1 | 0.08 |
| 7 | 60 | 8.57 | 0 | 0 |
| 8 | 58 | 7.25 | -2 | -0.233 |
Following formulas are used:
Averageproductivityoflabor = TPLMarginalproductivityoflabor = Delta TPDelta LElasticityofproductionwithlabor = % changeintotalproduct% changeinunitsoflabor
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