Quality of labor (workers) 0 1 2 3 4 5 6 Total product (units per hour) 0 2 5 9
ID: 1202412 • Letter: Q
Question
Quality of labor (workers)
0
1
2
3
4
5
6
Total product (units per hour)
0
2
5
9
15
18
17
The table above shows the total product schedule for The X Firm. Decreasing marginal returns occur with the ________ worker because ________.
a. 6th; output starts to decline
b. 6th; the marginal product of labor is greater than the average product of labor
c. 5th; the marginal product of labor for the 5th worker is less than the marginal product of the 4th worker
d. 4th; output reaches is maximum
e. 5th; the average product of labor is also declining
Quality of labor (workers)
0
1
2
3
4
5
6
Total product (units per hour)
0
2
5
9
15
18
17
Explanation / Answer
1.
The correct option is E.
When the marginal product is less than the average product, the marginal would pull down the average down and the average product also declines.
MP = Change in total product/change in quantity.
AP = total product/quantity.
quantity TP MP AP 0 0 nil nil 1 2 2 2 2 5 3 2.5 3 9 4 3 4 15 6 3.75 5 18 3 3.6 6 17 -1 2.833