The following table gives the marginal product schedule of labour. It is also given that total product of labour is zero at zero level of employment. Calculate the total and average product schedules of labour.
| 1 | 3 |
| 2 | 5 |
| 3 | 7 |
| 4 | 5 |
| 5 | 3 |
| 6 | 1 |
Calculation of Total Product (TP) Schedule:
Given that total product is zero at zero level of employment, and total product is the sum of marginal products of every preceding unit.
TP at L = 1: TP₀ + MP₁ = 0 + 3 = 3
TP at L = 2: TP₁ + MP₂ = 3 + 5 = 8
TP at L = 3: TP₂ + MP₃ = 8 + 7 = 15
TP at L = 4: TP₃ + MP₄ = 15 + 5 = 20
TP at L = 5: TP₄ + MP₅ = 20 + 3 = 23
TP at L = 6: TP₅ + MP₆ = 23 + 1 = 24
Calculation of Average Product (AP) Schedule:
Average product is calculated as: AP_L = TP_L / L
AP at L = 1: TP₁ / 1 = 3 / 1 = 3
AP at L = 2: TP₂ / 2 = 8 / 2 = 4
AP at L = 3: TP₃ / 3 = 15 / 3 = 5
AP at L = 4: TP₄ / 4 = 20 / 4 = 5
AP at L = 5: TP₅ / 5 = 23 / 5 = 4.6
AP at L = 6: TP₆ / 6 = 24 / 6 = 4
Final Schedules:
| L | MP_L | TP_L | AP_L |
|---|---|---|---|
| 0 | - | 0 | - |
| 1 | 3 | 3 | 3 |
| 2 | 5 | 8 | 4 |
| 3 | 7 | 15 | 5 |
| 4 | 5 | 20 | 5 |
| 5 | 3 | 23 | 4.6 |
| 6 | 1 | 24 | 4 |
Explanation
This question tests the relationship between Total Product (TP), Marginal Product (MP), and Average Product (AP). According to the textbook context, 'For any level of an input, the sum of marginal products of every preceeding unit of that input gives the total product.' This means TP is calculated by cumulatively adding MP values. The Average Product formula AP_L = TP_L / L is explicitly stated in the context. Students must remember that TP starts at zero when employment is zero, and then accumulates the marginal products.
Solution Steps
Step 1: Start with TP = 0 at L = 0 (given)
Step 2: Calculate TP for each level by adding MP to previous TP: TP_L = TP_(L-1) + MP_L
Step 3: Calculate AP for each level using formula: AP_L = TP_L / L
Step 4: Present both schedules in tabular format