Asked by Haktan Öztürkçü on Jul 08, 2024
Verified
As an economy recovers from a recession, the observed level of labor productivity tends to decline. Why?
A) The total product remains the same during the recovery, but the number of workers declines.
B) The total product increases during the recovery, but the number of workers declines.
C) The marginal product of labor declines as new workers enter the expanding work force.
D) The marginal product of labor increases at a slower rate than the decline in employment.
Labor Productivity
A measure of economic performance that compares the amount of goods and services produced with the number of labor hours used to produce them.
Total Product
The total quantity of output produced by a firm over a given period as a function of input quantities while holding technology constant.
Recovery
Recovery refers to the process of improvement or healing, often used in economic contexts to denote the period following a recession during which economic activity resumes and grows.
- Gain insight into the connection between marginal product and aspects that boost productivity, namely labor and technology.
Verified Answer
NJ
Nurin JaslinaJul 11, 2024
Final Answer :
C
Explanation :
During a recovery, more workers enter the expanding work force, and as a result, the marginal product of labor declines. This means that each additional worker hired produces less output than the previous worker, resulting in a decline in labor productivity.
Learning Objectives
- Gain insight into the connection between marginal product and aspects that boost productivity, namely labor and technology.