Why is the demand of labor a derived demand

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1) What is the law of diminishing marginal productivity? How does the law of diminishing marginal productivity affect the cost of productions? Provide an example from your workplace.

2) At a restaurant such as McDonald's the marginal productivity of an additional worker can be zero. A person that just comes in and punches the clock and adds nothing to output, since he or she stands around waiting for customers to come in.

What about when the restaurant is busy? Is the marginal product of labor still zero?

3) Why is the demand of labor a derived demand? What is the relationship between productivity and the wages earned by employees where you work or at an organization with which you are familiar? What are some factors that determine the level of your income? Explain your answer.

4) what would be another recommendation you could give a small business owner that makes sense at the micro level but would harm the broader economy if it is applied by a large number of businesses?

Reference no: EM131012263

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