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Return to Table 7.2 . In the top half of the table, at what point does diminishing marginal productivity kick in? What about in the bottom half of the table? How do you explain this?

Diminishing marginal productivity means as the input is increasing the additional production ofgoods is decreasing. As per the table when there are 2 lumberjacks producing 10 lumber themmarginal productivity is highest and after that it starts diminishing. In later half, the marginalproductivity keeps decreasing till the point it becomes zero i.e. at $5^{\text {th }}$ lumberjack there is nobenefit gained from it i.e. no additional production even when one more lumberiack is added.

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So in order to understand the answer to this problem, let's figure out what exactly we mean by diminishing marginal productivity. So here I have to empty plots on one. I have total productivity, and on the bottom, I have marginal productivity. So this should illustrate the relationship between the two. So, in total productivity, we have a point at which, as we increase the number of inputs we get an increase in the number of productivity and the amount of productivity. When you go from having one worker to two workers, you know it helps to have those that second worker, because that second worker can now help that first worker out some more. Um, the first worker doesn't have to handle everything themselves. Now when you go from 1 to 23 let's say it can start. Thio get a little bit crowded so you have diminishing marginal returns. So over here this is increasing, um, productivity, and this is increasing productivity, but at a slower rate, slower rate. But at some point you will have so many people we'll have so many people that it actually starts to decrease productivity altogether. You won't be able to produce a cz much. When you go from 1 to 2, it helps when you go from 2 to 3. It helps, but at a slower rate. When you go to 3 to 4, though, it could get so crowded that your people won't be able to help at all s so that it gets too crowded and people won't be able to work efficiently whatsoever. Now we can plot this as such. So if we just extend these lines, marginal productivity is increasing until we hit this green line and then it starts to decrease until we hit the blue line. And when we hit the blue line, we actually get to zero. Okay, so we have diminishing marginal productivity after we get to zero so that the total productivity's actually being hurt by hiring more inputs. So when we're talking about this problem here, we're talking about this problem here in order to figure out this problem here when we're trying to figure out when do we have diminishing marginal productivity? We have to see when marginal productivity is less than zero. When does it go from being greater than toe less than zero? So here it goes from 4 to 6. That's a positive change. 6 to 2. So from here we have in increasing increasing marginal, um, returns. Now we have from 62 diminishing marginal returns. Right, Because we are slowing down. Marginal production were still increasing the quantity of goods produced, but at a slower rate than we were before. When we go from 1 to 0, we still have diminishing marginal returns. But when we get to zero because of the mission Marshall returns, we're going to decrease the amount of productivity we have to the extent that if we hire another lumberjack, we will actually reduce productivity so that we reproduce less than we did when we had five Lumberjacks or four lumberjacks. So, um, this at five at five Lumberjacks, five lumberjacks, we diminishing marginal productivity, kids kicks in. And to answer part, maybe we can just look at this or when we're talking about the bottom half of the table. We can just look at these the relationship between these plots here. This is why we have diminishing marginal returns and then eventually diminishing marginal product because going from 1 to 2 lumberjacks it helps. The second lumberjack can help the first lumberjack. When you go from 2 to 3, there might, ah, you know, they're not as efficient. It gets a little crowded for them all to work and chop down trees. But when we go from 3 to 4, it still gets ah, a little bit harder. But, um, because even more crowded in the forest, wherever they're cutting, we get to 4 to 5 and cause even more crowded when they go from 5 to 6 become so crowded that they can't function at all or not that they can't function all they just can't.

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