Question

Average product in panel (b)

a) Rises when it is less than marginal product
b) Is the change in total product divided by the change in the quantity of labour
c) Can never exceed marginal product
d) Falls whenever total product in panel (a) rises at a diminishing rate

Answer 1

The average product in panel (b) is the change in total product divided by the change in the quantity of labor.

Step-by-step explanation:

The average product in panel (b) can be defined as the output per unit of input. It is calculated by dividing the total product by the quantity of labor. So, the correct answer to the question is option b) Is the change in total product divided by the change in the quantity of labour.

For example, if the total product is 100 units and the quantity of labor is 10 units, the average product would be 10 units per labor.

Additionally, it is important to note that the average product can rise or fall depending on the marginal product. In the short run, the marginal product initially increases but eventually decreases due to the law of diminishing marginal product.