In general, ______________ curve for labour in the input-output plane…

The correct answer is Option 1: Total Product

The total product curve in the input-output plane is a positively sloped curve.

The MP curve and the AP curve both looks like an inverse ‘U’-shaped curve.

According to the law of variable proportions, the marginal product of an input initially rises and then after a certain level of employment, it starts falling. The MP curve therefore, looks like an inverse ‘U’-shaped curve.

For the first unit of the variable input, the MP and the AP are same. Now as we increase the amount of input, the MP rises. AP being the average of marginal products, also rises, but rises less than MP. Then, after a point, the MP starts falling. However, as long as the value of MP remains higher than the value of the AP, the AP continues to rise. Once MP has fallen sufficiently, its value becomes less than the AP and the AP also starts falling. So AP curve is also inverse ‘U’-shaped.

Note:The input-output plane refers to a graph where:

• • Labour (input) is on the x-axis

  • Total Output is on the y-axis

This setup describes the Total Product (TP) curve, which shows how total output changes with varying amounts of labour input.

 

• Average Product (AP) and Marginal Product (MP) are not total output curves.

  • AP = TP ÷ Labour

  • MP = Change in TP ÷ Change in Labour

• These are plotted against labour on the x-axis, but they show output per unit of labour, not total output, so they are not in the input-output plane.