(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Speaker)
For this part, we are going to return the price of pizza to 2 dollars but increase the workers' productivity. A new high-tech oven allows each worker to become twice as productive.
(Description)
The table consists of 4 columns: Quantity of labor (workers), Quantity of pizza, MPL (pizzas per worker), VMPL subscript 1 (per worker) (price of pizza equals 2 dollars).
The last two columns are blank.
The table consists of 6 rows.
The first row: Quantity of labor is, 0 workers, Quantity of pizza is, 0.
The second row: Quantity of labor is, 1 workers, Quantity of pizza is, 18.
The third row: Quantity of labor is, 2 workers, Quantity of pizza is, 30.
The fourth row: Quantity of labor is, 3 workers, Quantity of pizza is, 38.
The fifth row: Quantity of labor is, 4 workers, Quantity of pizza is, 44.
The sixth row: Quantity of labor is, 5 workers, Quantity of pizza is, 48.
The following text is written above the table:
Now let's assume that Patty buys a new high-tech pizza oven that allows her workers to become twice as productive as before. That is, the first worker now produces 18 pizzas per hour instead of 9, and so on.
The following text is written below the table:
D. Calculate the new marginal product of labor and the new balie of the marginal product of labor.
(Speaker)
You will notice that we have doubled the quantity of pizzas produced at all levels of workers. The new technology will cause the marginal product of labor to double for all workers. The first worker Patty hires will now have a marginal product of 18 pizzas.
(Description)
A cell at the intersection of the second row and the column MPL is, equals 18 minus 0 equals 18.
(Speaker)
The marginal product will also double for workers two though five.
(Description)
A cell at the intersection of the third row and the column MPL is, equals 30 minus 18 equals 12.
A cell at the intersection of the fourth row and the column MPL is, equals 38 minus 30 equals 8.
A cell at the intersection of the fifth row and the column MPL is, equals 44 minus 38 equals 6.
A cell at the intersection of the sixth row and the column MPL is, equals 48 minus 44 equals 4.
(Speaker)
Two workers will now produce 30 pizzas, which gives the second worker a marginal product of 12, 30 minus 18. We find the marginal product for workers three through five in a similar manner. The value of the marginal product labor will also increase, this time because workers are more productive.
The first worker produces an additional 18 pizzas, which sell for 2 dollars. The additional value of the first worker is 36 dollars.
(Description)
A cell at the intersection of the second row and the column VMPL subscript 1 is, equals 18 times 2 dollars equals 36 dollars.
(Speaker)
You should notice that the value of the marginal product has doubled as technology doubled the production capabilities of each worker. This is also true for workers two through five.
(Description)
A cell at the intersection of the third row and the column VMPL subscript 1 is, equals 12 times 2 dollars equals 24 dollars.
A cell at the intersection of the fourth row and the column VMPL subscript 1 is, equals 8 times 2 dollars equals 16 dollars.
A cell at the intersection of the fifth row and the column VMPL subscript 1 is, equals 6 times 2 dollars equals 12 dollars.
A cell at the intersection of the sixth row and the column VMPL subscript 1 is, equals 4 times 2 dollars equals 8 dollars.