A firm is using a single variable input,labor,with a given amount of a fixed input,capital.If the level of capital is decreased,
A)the total product curve of labor curve shifts downward.
B)the average product curve of labor curve shifts downward.
C)the marginal product curve of labor shifts downward.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

When the level of capital is decreased in a production process that uses labor as a variable input and capital as a fixed input, the productivity of labor is likely to decrease because there is less capital for labor to work with. This decrease in productivity affects the total product (the total output produced by labor), the average product (the output produced on average by each unit of labor), and the marginal product (the additional output produced by an additional unit of labor). Therefore, all the curves representing these productivity measures—total product curve, average product curve, and marginal product curve—shift downward.

A Firm Is Using a Single Variable Input,labor,with a Given