📚 Learning Guide
Marginal Product Analysis
easy

In marginal product analysis, if the total product of an input increases as more units of that input are used, what does this indicate about the marginal product of that input?

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Choose the Best Answer

A

It is constant

B

It is decreasing

C

It is increasing

D

It cannot be determined

Understanding the Answer

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Answer

In marginal product analysis, when the total product of an input increases as more units are added, it means that the marginal product is also increasing or at least positive. The marginal product is the additional output generated by using one more unit of that input. For example, if a farmer adds more workers to a field and the total crop yield goes up, it shows that each new worker is contributing positively to the harvest. This situation indicates that the input is being used efficiently, as each additional unit is helping to create more output. However, after a certain point, the marginal product may start to decrease due to overcrowding or limited resources, so it's important to monitor how adding more units affects the overall production.

Detailed Explanation

When you add more of an input and the total product goes up, it means each extra unit is helping more. Other options are incorrect because Some might think that the extra output stays the same; This suggests that each new unit is less helpful.

Key Concepts

Total Product
Topic

Marginal Product Analysis

Difficulty

easy level question

Cognitive Level

understand

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