Question

Show that the last unit of variable input is paid the entire value of its output

Answer 1

Answer:

We can demonstrate the impact of adding more of a variable resource, say labor, to a fixed amount of capital and see what happens to output. For demonstration purposes in economics, we often make widgets, which is really any hypothetical manufactured device. Our widget will be made taking a quarter sheet of paper, folding it in half twice then stapling it and writing the letter W on it. If you have a big family, you can do this as a Family Home Evening activity; otherwise you can just read along to see the results. The inputs are a stack of quarter sheets of paper, one stapler, one pen, and a 2’ x 3’ sheet of poster board which represents your factory wherein all production must take place. Each round is a certain amount of time, say 40 seconds.

Answer 2

$\huge\bold\red{HOLA!!}$

It is defined as the output per unit of factor inputs or the average of the total product per unit of input and can be calculated by dividing the Total Product by the inputs (variable factors).