John’s Jelly Bean Jungle currently employs 10 workers and manufactures 100,000 pounds of jelly beans each year. The workers each earn $30,000 per year. Which of the following statements is true?

Question

There are currently diminishing marginal returns.

The average product is 10,000 pounds of jelly beans per worker.

The average product is 100,000 pounds of jelly beans each year.

The marginal product of the 10th worker is 9,000 pounds of jelly beans.

Answer 1

Let's analyze the statements based on the information provided:

1. There are currently diminishing marginal returns.

   • We don't have enough information to determine whether there are diminishing marginal returns, as this depends on the relationship between the number of workers and the output produced.

2. The average product is 10,000 pounds of jelly beans per worker.

   • The average product (AP) can be calculated by dividing the total output by the number of workers: \[ AP = \frac{Total ,Output}{Number ,of ,Workers} = \frac{100,000 \text{ pounds}}{10 \text{ workers}} = 10,000 \text{ pounds/worker} \]
   • This statement is true.

3. The average product is 100,000 pounds of jelly beans each year.

   • This statement is false, as the average product is calculated per worker, not the total output.

4. The marginal product of the 10th worker is 9,000 pounds of jelly beans.

   • We do not have enough information to determine the marginal product of the 10th worker, so we cannot confirm this statement.

Based on the calculations, the true statement is: The average product is 10,000 pounds of jelly beans per worker.