Indicate whether the following statements are true or false, and explain your answers:
a. When marginal product reaches its maximum, average product is also at its maximum.
b. When marginal product is less than average product, then it must be that average product is declining.
c. The law of diminishing marginal returns states that increases in the variable input reduce the total product.
d. A firm with one worker can produce 30 units of a product that sells for $4 per unit, but the same firm with two workers can produce 70 units of the same product. The marginal revenue product of the second worker is $400.
e. A firm can maximize profit in Stages I or II of production, but not Stage III.
Indicate whether the following statements are true or false, and explain your answers:
a. When marginal product reaches its maximum, average product is also at its maximum.
b. When marginal product is less than average product, then it must be that average product is declining.
c. The law of diminishing marginal returns states that increases in the variable input reduce the total product.
d. A firm with one worker can produce 30 units of a product that sells for $4 per unit, but the same firm with two workers can produce 70 units of the same product. The marginal revenue product of the second worker is $400.
e. A firm can maximize profit in Stages I or II of production, but not Stage III.
Related textbook solutions
Related questions
|
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.
