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Questions and Answers
What does it mean when $MPL1 < MPL2$?
What does it mean when $MPL1 < MPL2$?
- It signifies a constant marginal physical product
- By adding the next unit of labor, the increase in total production is negative
- By adding the next unit of labor, the increase in total production is higher than before (correct)
- By adding the next unit of labor, the increase in total production is lower than before (but total production is still increasing)
What is the formula for marginal physical product of labor?
What is the formula for marginal physical product of labor?
- $MPL = \frac{Q}{K}$
- $MPL = \frac{Q}{L}$
- $MPL = \frac{\partial Q}{\partial L}$ (correct)
- $MPL = \frac{\partial Q}{\partial K}$
What does a diminishing marginal physical product imply?
What does a diminishing marginal physical product imply?
- The marginal physical product is decreasing (correct)
- The marginal physical product is increasing
- The marginal physical product is constant
- The marginal physical product is negative
What is the formula for average product of fixed capital?
What is the formula for average product of fixed capital?
What does $MPL < 0$ indicate?
What does $MPL < 0$ indicate?
Flashcards
What does $MPL1 < MPL2$ mean?
What does $MPL1 < MPL2$ mean?
Adding the next unit of labor results in a greater increase in total production than the previous unit.
Formula for Marginal Physical Product of Labor
Formula for Marginal Physical Product of Labor
The change in output ($Q$) resulting from a change in labor ($L$).
Diminishing Marginal Physical Product
Diminishing Marginal Physical Product
The additional output from each additional unit of labor is decreasing.
Formula for Average Product of Fixed Capital
Formula for Average Product of Fixed Capital
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What does $MPL < 0$ indicate?
What does $MPL < 0$ indicate?
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