How does technology affect marginal product of labor?

For example, computer technology has increased the productivity (marginal product) of many types of workers. This has led to an increase in the marginal revenue product of labor for these jobs, shifting firms’ demand for labor to the right. This both increases the number of employed workers and increases the wage rate.

What happens when MPL decreases?

If something happens to decrease MPL at any given L, the labor demand curve shifts left and the equilibrium (W/P) falls. If something happens to decrease MPK at any given K, the capital demand curve shifts left and the equilibrium (R/P) falls.

Why is the marginal productivity of labor MPL likely to increase and then decline in the short run?

The marginal product of labor is likely to increase initially because when there are more workers, each is able to specialize in an aspect of the production process in which he or she is particularly skilled. At this point, the marginal product will begin to diminish.

Why does marginal product of labor increase then decrease?

Your factory’s diminishing marginal product means the beneficial effect of adding new workers is decreasing. This is also known as the law of diminishing returns: In any fixed production scenario, adding inputs eventually causes the marginal product to fall.

How does change of technology affect the production potential curve?

Answer: new and better technology will lead to out world shift in production possibility curve. It means that more goods can be produced with the same amount of resources. Any improvement in techno will lead to more output inemurated by an outward shift in production possibility curve.

What is the impact of technological change on economic growth?

According to the growth principle in neo-classical theory, technological transformation causes an increase in the capita per person and motivates savings and investments and as a result, causes an increase to real GDP. If technological transformation ceases, the growth will also stop.

How do specialization and division of labor typically affect the marginal product of labor?

In the initial stages of​ production, specialization and division lead to an increasing marginal product of labour for​ workers, allowing workers to concentrate on a few tasks so that they become more skilled at doing them quickly and efficiently.

When the marginal product of labor is greater than the average product of labor?

Whenever the marginal product of labor is greater than the average product of labor, the average product of labor must be increasing. ex) even if you get a low GPA first semester, if your GPA continuously increases, your average cumulative GPA will rise as well. 2.

Why is the marginal product of labor likely to increase initially?

The marginal product of labor is likely to increase initially because when there are more workers, each is able to specialize on an aspect of the production process in which he or she is particularly skilled. For example, think of the typical fast food restaurant. At this point, the marginal product will diminish.

How technological change affects productivity and thus economic growth?

Technological change is the most important factor that determine rate of economic growth. Thus technological progress means increase in total factor productivity. As a result of technological advance, it becomes possible to produce more output with same resources or the same amount of product with less resource.