The marginal product of labor
A)measures how output changes as the wage rate changes.
B)is less than the average product of labor when the average product of labor is decreasing.
C)is negative when adding another unit of labor decreases output.
D)both a and b
E)both b and c

Question

Quizplus · Accepted Answer

Option E is the correct choice because the marginal product of labor is the change in output resulting from adding one more unit of labor. If the marginal product of labor is negative, then adding another unit of labor decreases output. If the average product of labor is decreasing, then the marginal product of labor must be less than the average product of labor. Therefore, both statements in options B and C are correct. Option A is incorrect because the marginal product of labor does not measure how output changes as the wage rate changes, but rather how output changes as one more unit of labor is added.

The Marginal Product of Labor