Calculation of Marginal Product of Labor

Context

• Location: Parker's Peanut Farm
• Objective: Calculate the marginal product of labor when increasing from 15 to 20 workers.

Information Given

• Production with 15 Workers: 240 pounds of peanuts
• Production with 20 Workers: 300 pounds of peanuts

Calculating Marginal Product of Labor

• Marginal Product of Labor Formula:
  • Change in Output / Change in Labor

Steps

1. Determine Change in Output:

   • From 240 pounds to 300 pounds
   • Calculation: 300 - 240 = 60 pounds

2. Determine Change in Labor:

   • From 15 workers to 20 workers
   • Calculation: 20 - 15 = 5 workers

3. Calculate Marginal Product of Labor:

   • 60 pounds (change in output) / 5 workers (change in labor)
   • Result: 12 pounds of peanuts per worker

Conclusion

• The marginal product of labor, when increasing from 15 to 20 workers at Parker’s Peanut Farm, is 12 pounds of peanuts per worker.

This calculation provides insight into the productivity increase attributed to each additional worker within this specific worker range.