Sapling Learning macmillan learning Below is production information for a firm t

Question

Sapling Learning macmillan learning Below is production information for a firm tha uses a fixed amount of capital and varying amounts of labor. Use this information to answer the questions. Do not round your answers. Workers Output What is the marginal What is the average (total product) product of the second product of the third worker? worker? 3.0 2 Number Number 13.0 Units Units 4 17.0 What are diminishing marginal returns, and with which worker do they set in for this firm? Diminishing marginal returns occur in the short run when variable inputs are added to a fixed input, and marginal product declines. In this case, diminishing returns set in with the fourth worker o Diminishing marginal returns occur in the short run when fixed inputs are added to a variable input, and marginal product declines. In this case, diminishing returns set in with the fourth worker. Diminishing marginal returns occur in the short run when variable inputs are added to a fixed input, and average product declines. In this case, diminishing returns set in with the fourth worker. Diminishing marginal returns occur in the short run when variable inputs are added to a fixed input, and marginal product increases. In this case, diminishing returns set in with the second worker

Explanation / Answer

Marginal Product of the third worker = Total Product of 3 workers - total product of 2 workers = 13 - 7 = 6 units

Average product of second worker = Total product of 2 workers / 2 = 7 / 2 = 3.5 units

Option A. They set in with the fourth worker when MP starts declining from 6 to 4.

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