CFA论坛 - Powered by Discuz! Board

LOS b: Describe and explain the relations among total product of labor, marginal product of labor, and average product of labor, and describe increasing and decreasing marginal returns.

Which of the following conditions is most likely to exist for a typical production process when average product is at its maximum?

A)	Average variable cost is at a minimum.

B)	Marginal product is increasing.

C)	Marginal cost is at a minimum.

When average product is at a maximum, average variable cost is at a minimum. At the corresponding labor and output level, marginal product is decreasing and marginal cost is increasing.

A)	30 units per day per worker.

B)	1.55 units per day per worker.

C)	1.25 units per day per worker.

Marginal product is the additional output per additional unit of an input (labor). Since output changed by 300 units and labor changed by 10 workers, the marginal product is 300 / 10 = 30 units per day per worker.

Which of the following most accurately describes the typical relationship between marginal product (MP) and average product (AP)? As the quantity of labor increases:

A)	initially, AP > MP, then AP = MP, then AP < MP.

B)	initially, AP < MP, then AP = MP, then AP > MP.

C)	initially, AP = MP, then AP > MP.

MP intersects the AP minimum from above. MP is initially greater than average product, and then MP and AP intersect. Beyond this intersection, MP is less than AP. (Hint: sketch the curves.)

Which of the following most accurately describes the condition that typically exists when marginal product is at a maximum?

A)	Average variable cost is at a minimum.

B)	Marginal cost is at a minimum.

C)	Average product is at a minimum.

Marginal product is at a maximum when marginal cost is at a minimum. At the corresponding labor and output levels, average variable cost is decreasing and average product in increasing.

If the last unit of input increases total product we know that the marginal product of that input is:

As long as marginal product is positive, total product will increase. We would need more information to determine whether marginal product is falling or increasing.

Typically, the short-run marginal product curve for an input used in production:

A)	increases initially, reaches a peak, and then declines.

B)	increases proportionately to output.

C)	decreases proportionately to output.

The marginal product curve for an input typically increases initially, reaches a peak at some point, and then decreases (marginal cost increases) as additional units of the input are used, holding the quantities of other factors constant.