Refer to Scenario 7.4 below to answer the questions that follow.
SCENARIO 7.4: A lawn service company has the following production possibilities. With one, two, three, and four workers, the company can mow 4, 9, 12, and 14 lawns per day, respectively.
-Refer to Scenario 7.4. The average product of labor with three workers is
A) 3
B) 3.5
C) 4
D) 12

Question

Quizplus · Accepted Answer

To calculate the average product of labor with three workers, we divide the total output (12 lawns) by the number of workers (3). Therefore, the average product of labor with three workers is 4 (12/3).

Best choice(s): Hire three workers to mow 12 lawns per day, as this is the point of maximum efficiency. With four workers, only two additional lawns are mowed compared to three workers, making the extra cost of hiring another worker less worthwhile. With one or two workers, the output is lower and does not maximize efficiency.