The output elasticity of labor is
A) equal to one at the level of output where average product is at a maximum.
B) the percentage change in labor required to produce one more unit of output.
C) equal to the ratio of total product to the quantity of labor employed.
D) a measure of the percentage change in output that can result when the quantity of labor is held constant.

Question

Quizplus · Accepted Answer

Output elasticity of labor is equal to one at the level of output where the average product of labor is at its maximum. This is because the average product of labor is at its peak when an additional unit of labor does not change the average productivity, indicating a unitary elasticity of output with respect to labor.

The Output Elasticity of Labor Is