Use the following for questions 37-43.
Exhibit: Total Product

-(Exhibit: Total Product) After hiring L₂ units of labor and producing at point B on the total product curve, hiring more units of labor would result in which of the following statements being true?
A) The marginal product of labor is rising.
B) The marginal product of labor is negative.
C) Total product is negative.
D) Average product is negative.

Question

Use the following for questions 37-43.
Exhibit: Total Product
 
-(Exhibit: Total Product) After hiring L₂ units of labor and producing at point B on the total product curve, hiring more units of labor would result in which of the following statements being true?
A) The marginal product of labor is rising. 
B) The marginal product of labor is negative. 
C) Total product is negative. 
D) Average product is negative.

Quizplus · Accepted Answer

At point B, the total product curve is still upward sloping, but the slope is decreasing, indicating that the marginal product of labor is diminishing. Therefore, hiring more units of labor would result in a negative marginal product of labor (i.e. option B). Total product is still positive and increasing at this point, so options C and D are incorrect. Option A is incorrect because the marginal product of labor is diminishing, not rising.

Use the Following for Questions 37-43