Consider a Basket- Producing Firm with Fixed Capital

question 77

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 productivity to 44 baskets per day with 4 workers,then which of the following statements is true?

• A)The marginal product of the fourth worker is 11.
• B)The firm has passed the point of diminishing average productivity.
• C)With 4 workers,the firm's average product of labour is 13.
• D)The firm has not yet reached the point of diminishing marginal productivity.
• E)The marginal product is above the average product.

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Definitions:

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