An increase in the labor productivity is best illustrated by:

Question

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An increase in labor productivity means that each worker is producing more output per hour of work. This leads to an increase in the marginal revenue product (MRP) of labor, which is essentially the additional revenue a firm earns when it hires one more worker. An upward shift of the MRP curve illustrates this increase in productivity. Choice B is incorrect because a downward shift of the marginal physical product (MPP) curve would indicate a decrease in productivity. Choices C and D are also incorrect because shifts in the labor-supply curve do not directly reflect changes in productivity.

An Increase in the Labor Productivity Is Best Illustrated By