"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect
What will be an ideal response?
The statement is incorrect. The relationship between the marginal product and average product of labor is that when the marginal product of labor exceeds the average product of labor, the average product of labor curve slopes upward and when the marginal product of labor is less than the average product of labor, the average product of labor curve slopes downward. So, even if the marginal product of labor curve slopes downward, as long as it is above the average product of labor curve, the average product of labor curve slopes upward.
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Economics is best defined as the study of:
A. supply and demand. B. inflation, interest rates and the stock market. C. the financial concerns of businesses and individuals. D. how people make choices in the face of scarcity and the implications of those choices for society as a whole.
Refer to the above table. The table gives the various combinations of Good A and Good B along Jane's indifference curve. The marginal rate of substitution when Jane goes from combination A to combination B is
A. 4:1. B. 3:1. C. 2:1. D. 0.