-The table above shows the total product schedule for The X Firm.Increasing marginal returns occur until the ________ worker because ________.
A) 4th; the marginal product of the 4th worker exceeds the 3rd worker, but not the 5th worker
B) 5th; output is maximized
C) 5th; output declines with the 6th worker
D) 3rd; the average product of labor is also increasing
E) 4th; the average product of labor is also increasing

Question

-The table above shows the total product schedule for The X Firm.Increasing marginal returns occur until the ________ worker because ________.
A) 4th; the marginal product of the 4th worker exceeds the 3rd worker, but not the 5th worker 
B) 5th; output is maximized 
C) 5th; output declines with the 6th worker 
D) 3rd; the average product of labor is also increasing 
E) 4th; the average product of labor is also increasing

Quizplus · Accepted Answer

Increasing marginal returns occur when each additional unit of input (in this case, each additional worker) results in a larger increase in output than the previous unit of input did. This is observed until the point where the marginal product (additional output produced by an additional worker) starts to decline. Choice A is correct because it indicates that the marginal product of the 4th worker is higher than that of the 3rd worker, which means increasing marginal returns are still occurring up to the 4th worker. The mention of the 5th worker is to clarify that the increase in marginal returns does not extend beyond the 4th worker.

-The Table Above Shows the Total Product Schedule for the X