The Specific Factors Model The shape of the production function reflects the law of diminishing marginal returns Adding one worker to the production process(without increasing the amount of capital) means that each worker has less capital to work with Therefore. each additional unit of labor will add less to the production of output than the last Figure 3-2 shows the marginal product of labor, which is the increase in output that corresponds to an extra unit of labor Copyright C 2003 Pearson Education, Inc Slide 3-10Copyright © 2003 Pearson Education, Inc. Slide 3-10 • The shape of the production function reflects the law of diminishing marginal returns. – Adding one worker to the production process (without increasing the amount of capital) means that each worker has less capital to work with. – Therefore, each additional unit of labor will add less to the production of output than the last. • Figure 3-2 shows the marginal product of labor, which is the increase in output that corresponds to an extra unit of labor. The Specific Factors Model