Final answer:
The only correct statement is that MPL is proportional to average labour productivity. Other options incorrectly describe the relationships between marginal products of capital and labor with average productivity; the marginal product is about additional output from an extra unit, not the average.
Step-by-step explanation:
The correct statements regarding the Marginal Product of Capital (MPK) and the Marginal Product of Labor (MPL) are as follows:
- MPL is proportional to average labour productivity.
The other options provided do not accurately describe the relationship between marginal products and average productivity. MPK being proportional to average capital productivity or inversely proportional are incorrect because MPK is about the additional output from an extra unit of capital, not directly related to average productivity. Also, MPL is not related to average capital productivity, whether directly or inversely.
The concept of marginal product is crucial because it describes how the additional output varies when an additional unit of labor or capital is employed. For labor, the marginal product initially increases as more workers are added due to more effective use of capital, but eventually, the Law of Diminishing Marginal Product suggests that additional workers will contribute less to output, and the MPL will decline.