Describe the relationship between the marginal and average products of labor as the employment of labor increases in the short run
What will be an ideal response?
Holding other factors such as capital constant, additional workers have increasing and then diminishing marginal returns. So, the marginal product of additional workers rises and then falls, even though remaining positive. As that happens, when the marginal product is greater than the average product, the average product is increasing. When the marginal product is less than the average product, the average product is decreasing. The average product equals the marginal product when the average product is at its maximum.
You might also like to view...
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Characterize the following events as being prounion or antiunion: the Taft-Hartley Act, the Wagner Act, the Landrum-Griffin Act, the National Labor Relations Board, the Norris-LaGuardia Act, the PATCO incident in the 1980s, and NAFTA
If there are 40 firms in a monopolistic competitive industry, the oldest (or first) firm will have ___________ market share to qualify as the oldest (or first) firm
a. no less than 50 percent b. no less than 10 percent c. no more than 5 percent d. no more than 1 percent e. there is no specific percentage
Consider the straight-line demand curve illustrated in the above figure. At what price is total revenue maximized?
A) at a price of $8 B) at a price of $6 C) at a price of $4 D) More information is needed to determine the price at which total revenue is maximized.