Total product divided by the number of units of a resource employed gives the product of the resource.
Question
Total product divided by the number of units of a resource employed gives the product of the resource.
Solution
The statement you provided is referring to the concept of "Average Product" in economics. Here's how you calculate it:
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Identify the total product: This is the total output or production of a firm.
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Identify the number of units of a resource employed: This refers to the quantity of the input or resource used in the production process. This could be labor, capital, land, etc.
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Divide the total product by the number of units of a resource employed: This calculation will give you the average product.
The average product is a measure of productivity. It tells you the output per unit of input. In other words, it shows how effective a firm is at turning its inputs into outputs.
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