John leases a farmer's field for $80 a day and grows butternut squash. During harvest time, he pays seasonal workers $100 a day to pick the squash and leases the tools (capital) needed for picking and transportation at $50 a day. Labor: 0, Total product: 0; Labor: 1, total product: 40; labor: 2, total product: 100; labor: 3, total product: 170; labor: 4, total product: 270; labor: 5, total product: 350; labor: 6, total product: 410; labor: 7, total product: 440. 

Calculate the marginal product using the attached Excel spreadsheet to populate the corresponding column in the table. 

When do marginal returns to labor begin to decrease? 

What does this mean for John? Should he hire seven workers per day, or more, or less? 

How does this depend on the length of harvest time?

Answer rating: 100% (QA)

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