Question

Microeconomics

Posted 2 months ago

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If the marginal product of labor $\left(M P_{L}\right)$ is 10 pounds of cheese and the average product of labor $\left(A P_{L}\right)$ is 20 pounds of cheese, which of the following best describes what happens if one more unit of labor is added?
Choose 1 answer:
(A) $M P_{L}$ equals total product of labor $\left(T P_{L}\right)$
(B) $A P_{L}$ decreases.
(c) $A P_{L}$ is maximized
(D) Total product of labor $\left(T P_{L}\right)$ increases
(E) $M P_{L}$ increases
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Answer from Sia

Posted 2 months ago

Solution

a

Given: The marginal product of labor ($MP_L$) is 10 pounds of cheese and the average product of labor ($AP_L$) is 20 pounds of cheese

b

Relationship: When $MP_L$ is less than $AP_L$, adding one more unit of labor will decrease $AP_L$

Answer

(B) $A P_{L}$ decreases.

Key Concept

Marginal Product of Labor and Average Product of Labor Relationship

Explanation

When the marginal product of labor ($MP_L$) is less than the average product of labor ($AP_L$), adding an additional unit of labor will cause the average product of labor to decrease. This is because the new worker's contribution is less than the current average, pulling the average down.

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