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Question 5 (1 point) At Stus barber shop, the marginal product of labor is 12, and the average product of labor is 18. At Jo
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Answer #1

5.Ans: decrease; increase

Explanation:

MP = change in total product / change in number of labor

AP =  total product / number of labor

When MP is less than the AP , then the AP curve lies above the MP curve . It means , the average product of labor will decrease if another labor or worker is added.

When MP is greater than the AP , then the AP curve lies below the MP curve . It means , the average product of labor will increase if another labor or worker is added.

In the above case, Stu's average product of labor would decrease if he hired another barber. Jo's average product of labor would increase if he hired another barber.

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