Correct Option: B. above it
Detailed Explanation:
To understand why the correct answer is B (the marginal physical product is above the average physical product when the average physical product curve is rising), we need to break down the concepts of average physical product (APP) and marginal physical product (MPP).
- Definitions:
-
Average Physical Product (APP): This is the total output produced per unit of input. It is calculated by dividing the total product (TP) by the quantity of input used (usually labor). The formula is:
[
APP = \frac{TP}{L}
]
where ( L ) is the quantity of labor.
-
Marginal Physical Product (MPP): This is the additional output produced by adding one more unit of input, holding all other inputs constant. It is calculated as the change in total product when one additional unit of input is employed. The formula is:
[
MPP = \frac{\Delta TP}{\Delta L}
]
-
Relationship Between APP and MPP:
-
The relationship between APP and MPP is crucial in understanding their behavior. When the APP is rising, it indicates that the average output per unit of input is increasing. For this to happen, the MPP must be greater than the APP. This is because if the MPP were less than the APP, adding more input would pull the average down, causing the APP to fall.
-
Graphical Representation:
- Imagine a graph where the x-axis represents the quantity of input (like labor) and the y-axis represents the output (total product). The APP curve is typically U-shaped. When the APP is rising, it is on the upward slope of this U-shaped curve.
-
The MPP curve intersects the APP curve at its maximum point. When the APP is increasing, the MPP is above the APP curve. As more units of input are added, if each additional unit contributes more to total output than the average, the APP will continue to rise.
-
Conclusion:
- Therefore, when the APP is rising, the MPP must be above the APP. This is why option B is correct.
Why Other Options Are Incorrect:
-
Option A: below it: This option suggests that the MPP is less than the APP when the APP is rising. This is incorrect because if the MPP were below the APP, it would mean that adding more input would decrease the average output, causing the APP to fall.
-
Option C: falling: This option implies that the MPP is decreasing. While it is possible for MPP to decrease as more input is added (due to diminishing returns), this does not directly relate to the APP being on the rise. The MPP can be falling but still be above the APP as long as it is still greater than the APP.
-
Option D: zero: This option suggests that the MPP is zero when the APP is rising. If the MPP were zero, it would mean that adding more input does not increase output at all, which contradicts the premise that the APP is rising.
Common Pitfalls:
- Confusing APP and MPP: Remember that APP is an average measure, while MPP is a marginal measure. They behave differently as input changes.
- Misinterpreting the curves: Always visualize the relationship between APP and MPP on a graph to understand their interaction better.
Revision Summary:
- When APP is rising, MPP must be greater than APP.
- MPP is the additional output from one more unit of input, while APP is the average output per unit of input.
- The relationship between APP and MPP is crucial for understanding production functions.
- Always visualize the curves to avoid confusion between average and marginal products.