If more and more labor is employed while keeping all other inputs constant, the marginal physical productivity of labor a will eventually increase. b. will eventually decrease. e. will eventually remain constant. d. cannot tell from the information provided.

If more and more labor is employed while keeping all other inputs constant, the marginal physical productivity of labor a will eventually increase. b. will eventually decrease. e. will eventually remain constant. d. cannot tell from the information provided.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 6P

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Concept explainers

Labor Force Participation Rate analysis

The labor force participation rate analysis calculates the percentage of the working-age population either employed or actively seeking work. It can be anyone in the age category of 16 to 64, on the condition that they are not institutionalized. A high labor force participation rate shows that more people are employed and contributing their wages to the economy, making it a healthy economy. It also shows that there are more people actively looking for employment leading to more hiring options for employers. On the other hand, a low labor force participation rate shows a low number of people employed or looking for work. This leads to an economic setback with fewer wages going into the economy. In such a scenario, employers might have to cut back on profits, lay off employees, or stop the process of hiring.

Question

If more and more labor is employed while keeping all other inputs constant, the marginal physical
productivity of labor
a. will eventually increase.
b. will eventually decrease.
will eventually remain constant.
d. cannot tell from the information provided.

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