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The marginal product of labor

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The marginal product of labor

a. measures how output changes as the wage rate changes
b. is equal to the average product of labor divided by the amount of capital stock
c. is greater than the average product of labor when the average product of labor is decreasing
d. can be negative
e. a and b

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The solution describes marginal product of labor.

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Marginal product is what an additional unit of labor or capital adds to the value of output, calculated as (change in output)/(change in number of workers). So marginal product is generally what workers are paid for their services. A company will not want to underpay them if it has competitors who would hire them for more. So there is a loose relationship between wages and output, as stated in a. But this isn't really what marginal product means. Other things could affect wages besides worker productivity, such as inflation. Let's look at the other options.

If for a given capital stock, adding more labor causes output to rise, but at a diminishing rate (law of ...

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