Relation Between TP, AP and MP and their Curves - Economics Video Lecture | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year

in this video I'm going to talk about
production theory a typical topic in
economics eventually we're going to get
to a graphs that look like this using
the chart above as well
it turns out quantity produces a
function of Labor and capital by capital
remain equipment by labor we mean people
and we often write it like this that
quantity is a function of Labor and
capital we use K for capital
I need to introduce a couple formulas
one is average product and that's equal
to total product divided by total labor
or labor next we have marginal product
and that's equal to change in total
product divided by change in labor which
is how much one more worker can produce
it's often written as Delta total
product which means change in total
product divided by change in labor and n
equals to total product divided by 1 in
this example here and I'll discuss that
more
one last point of interest is the
marginal product is the slope of the
average product line so when we plot
quantity produced on the y-axis and
labor along the x-axis the total product
curve looks something like that average
product like that and marginal product
like that
the area to the left that line the blue
area a little bit lighter may less a
little too much that's where each
additional worker is adding more than
the previous worker so the slope of that
line is the marginal product as well now
in between this two areas adding more
labor adding more workers adds to total
product but they're adding less than the
previous worker did and we'll look at
the table in a second anything to the
right of the green dot additional labor
actually subtracts from total product
now I wanna make a table the first three
columns are given in this case 3 0 0
average product is nothing and
Barnesville project is nothing is
capital's fixed at 3 Labour's at 1 total
products 5 so average product of labor
is 5 divided by 1 which is equal to 5
marginal product of labor is 5 minus 0
divided by 1 which is 5 I'll talk about
that in the next example
again amount of capitals three laborers
to total products 18 average product is
18 divided by 2 which is 9 marginal
product of labor is 18 minus 5 if we
move it over there there it is / - come
on - there it is minus 1 and that of
course if you did the math it would
equal to 13
now I'm going to populate
a table quickly and you can actually
pause it and do the math yourself if you
want to there we go and let's add five
and then also negative four there we go
now that would be the graphs so the
graphs equate to these numbers here
anyway
moving right along kind of slowly
average again marginal product is total
product divided by labor I want to talk
about this a little more in this case
three and we have the 48 245 the
difference in labor is 1 in fact the
difference in labor in this case is
always 1 so I can just divide whatever
the numbers the two numbers are of total
product like between 40 and 30 in that
case it is 40 minus 30 and 10 because
I'm actually dividing by one if that
makes sense to you well that's about it
for a little bit of introduction to
production theory and I'll talk to you
later bye-bye