Figure 6.2.2
-Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor?
A) AP = 5
B) AP = 5K
C) AP = 5L
D) AP = 5K/L

Question

Figure 6.2.2
-Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor?
A) AP = 5 
B) AP = 5K 
C) AP = 5L 
D) AP = 5K/L

Quizplus · Accepted Answer

The average product of labor (APL) is calculated as the total output (q) divided by the number of units of labor (L). Given the production function q = 5KL, the total output per unit of labor is q/L = 5KL/L = 5K, making the average product of labor 5K.

Figure 6.2.2 -Joe Owns a Coffee House and Produces Coffee Drinks Under