Flashcards in Production in the Short Run 7.2-4-Jenna Bryant Deck (12)
What is average product?
The total product divided by the total quantity of labor. The average amount of output each worker can produce
What is another name for average product?
Average product of labor (APL)
What is the formula for average product?
Divide total product by the number of employees
What initially happens to the AP curve?
AP initially rises to a maximum and then falls as additional workers are added
When AP is rising it is below or above MP?
It is below MP
When AP is falling it is below or above MP?
It is above MP
When does the MP and AP curve intersect?
At the maximum AP
What shape is the AP curve?
The AP curve is U shaped
The MP and AP curve always intersect?
At the maximum of the AP curve
There are 2 employees that can produce a total of 12 TVs, what is the average product?
12/2=6 The average product is 6
There are 4 employees that can produce a total of 40 TVs, what is the average product?
40/4=10 The average product is 10