Consider a Basket- Producing Firm with Fixed Capital

question 59

Multiple Choice

Consider a basket- producing firm with fixed capital.If the firm can produce 36 baskets per day with 3 workers and then increases production to 44 baskets per day with 4 workers,then which of the following statements is true?

• A)With 4 workers,the firm's average product of labour is 8.
• B)The marginal product of the fourth worker is 11.
• C)With 4 workers,the marginal product is above the average product.
• D)The firm has passed the point of diminishing marginal productivity.
• E)The firm has not yet reached the point of diminishing marginal productivity.