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

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

Quizplus · Accepted Answer

By locating the point on the total product curve where three units of labor are employed and drawing a line straight up to the total product axis, we can see that the total product is approximately 8 units. Therefore, the average product when three units of labor are employed is 8/3 or approximately 2.67 units of output per unit of labor. This is higher than the average product when two units of labor are employed, which is approximately 2 units of output per unit of labor, so the correct answer is D.

Exhibit 7-13 the Total Product of Labor Given the Information