Economics - 0355 - CHAPTER 12 B E H I N D T HE S U P P L Y...

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C H A P T E R 12 BEHIND THE SUPPLY CURVE: INPUTS A N D COSTS 307 FIGURE 1 2 -2 M arginal P roduct of Labor Curve fo r G eorge and M artha's Farm The marginal product of labor curve plots each worker's marginal product, the increase in the quantity of output generated by each additional worker. The change in the quanti- ty of output is measured on the vertical axis and the number of workers employed on the horizontal axis. The first worker employed generates an increase in output of 19 bushels, the second worker generates an increase of 17 bushels, and so on. The curve slopes downward due to diminishing returns to labor. To grasp why dim inishing returns can occur, th in k about w hat happens as George and M artha add m ore and m ore workers w ithout increasing the num ber of acres. As the num ber of workers increases, the land is farm ed m ore intensively and the n u m - ber of bushels increases. But each additional w orker is w orking w ith a sm aller share of the 10 acres—the fixed in p u t—th a n the previous worker. As a result, the addition-
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