J Calculate and Interpret total, marginal, and average product of labor Flashcards
For a productin process w/ a fixed amount of capital we, can define the following terms (total product of labor, average product of labor, marginal product of labor)
Total product of labor:The output for a specific amount of labor
Average product of labor per worker: The total product of labor / the #workers
Marginal Product of Labor: The addition to the total product of labor from employing one more unit of labor.
Total product measure in analysis
Use is limited, does not measure the efficiency of any one firm. Provides info on the output of the firm relative to industry output
Average Product in analysis
Measures overall efficiency, not the efficiency of one worker
Marginal Product in analysis
A better of measure of individual productivity