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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.

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Solution

The statement you provided is referring to the concept of "Average Product" in economics. Here's how you calculate it:

  1. Identify the total product: This is the total output or production of a firm.

  2. 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.

  3. 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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