Exhibit 7-13 The Total Product of Labor -Given the information in Exhibit 7-13, what is the average product when three units of labor are employed? A) more than two-thirds units of output B) less than one-third of a unit of output C) less than the average product when two units of labor are employed D) more than the average product when two units of labor are employed E) cannot be determined from the graph of total product

Question

Quizplus · Accepted Answer

The average product of labor is the total product divided by the amount of labor used. From the graph, we can see that when three units of labor are employed, the total product is approximately 130. Therefore, the average product when three units of labor are employed is 130/3, which is greater than the average product when two units of labor are employed, making option D the correct answer.

Exhibit 7-13 the Total Product of Labor