Exhibit 6-1 Production of pizza data Workers Pizzas 0 0 1 4 2 10 3 15 4 18 5 19

Question

Exhibit 6-1 Production of pizza data

Workers

Pizzas

0

0

1

4

2

10

3

15

4

18

5

19

Exhibit 6-1 shows the change in the short-run production of pizzas as more workers are hired. The table shows the marginal product of the labor input is decreasing with the hiring of the third worker. A possible reason for this diminishing marginal product is:

a.

decreased wages.

b.

increases in plant size.

c.

decreases in number of workers.

d.

increased division of labor as additional workers are hired.

e.

decreases in labor productivity.

Workers

Pizzas

0

0

1

4

2

10

3

15

4

18

5

19

Explanation / Answer

E) Decrease in labor productivity

This is the only criteria we can be certain about, All the other criteria actually can just be guess work. So decrease in labor productivity can be the only cause of reduction in productivity, It is also called marginal product of labor.

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