The following diagram depicts the production function of grain, where diminishing average product of labour is assumed. At A the average product of labour is 500,000/800 = 625 kg of grain per farmer. At B the average product of labour is 732,000/1,600 = 457.5 kg of grain per farmer. You know that the grain output for 2,800 farmers is 896,000kg. Read the following statements and select the correct one(s). Multiple choice
A
In a year with exceptionally good weather conditions, the production function curve will be higher and parallel to the curve above.
B
If the production curve is an upward-sloping straight line, the average product of labour is constant.
C
When the labour input is 2,800, the average product of labour is 320 kg.
D
Diminishing average product of labour is only assumed in some regions of this graph, but not everywhere in the graph.
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