Asked by Kierra Lewis on Jun 17, 2024

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Consider the following statements when answering this question: I. Whenever the marginal product of labor curve is a downward sloping curve, the average product of labor curve is also a downward sloping curve that lies above the marginal product of labor curve.
II) If a firm uses only labor to produce, and the production function is given by a straight line, then the marginal product of labor always equals the average product of labor as labor employment expands.

A) I is true, and II is false.
B) I is false, and II is true.
C) Both I and II are true.
D) Both I and II are false.

Marginal Product

The increase in output that results from a one-unit increase in the quantity of a single input, holding the quantities of all other inputs fixed.

Average Product

It is the output that is produced, on average, by each unit of input in the production process, like labor or machinery.

Production Function

A mathematical relationship that describes how inputs are transformed into outputs in the production process, illustrating the maximum output achievable from a given set of inputs.

  • Gain an understanding of the link and variances between marginal product and average product of labor.
  • Examine the outcomes of augmenting the application of labor on production, highlighting scenarios where the principle of diminishing returns is relevant.
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Christal RhodemanJun 21, 2024
Final Answer :
B
Explanation :
I is false because the average product of labor curve can initially be increasing even when the marginal product of labor is decreasing, as long as the marginal product is above the average product. It's only when the marginal product falls below the average product that the average product starts to decline. II is true because if the production function is linear (a straight line), it implies constant returns to the variable input (labor), meaning that the marginal product of labor is constant. Since the marginal product is constant and equals the slope of the production function, and the average product of labor is calculated as total output divided by total labor (which also equals the slope of the line in a linear production function), both the marginal and average products of labor are equal and constant as labor employment expands.