Figure 7-1
-USX, a steel company, reduced the number of man-hours required to produce a ton of steel from 10.8 in 1982 to 3.8 in 1990, thereby eliminating 55,000 jobs.Technically, this rise in productivity means the
A)marginal product of labor increased.
B)average product of labor increased.
C)average product of capital fell.
D)marginal product of capital fell.

Question

Figure 7-1 
-USX, a steel company, reduced the number of man-hours required to produce a ton of steel from 10.8 in 1982 to 3.8 in 1990, thereby eliminating 55,000 jobs.Technically, this rise in productivity means the
A)marginal product of labor increased. 
B)average product of labor increased. 
C)average product of capital fell. 
D)marginal product of capital fell.

Quizplus · Accepted Answer

The reduction in man-hours required to produce a ton of steel indicates an increase in the average product of labor. This means that, on average, each worker was able to produce more output, leading to increased productivity for the company. The other choices are not relevant to the given information about the change in man-hours and job losses.

Figure 7-1 -USX, a Steel Company, Reduced the Number of Man-Hours Required