GM cuts jobs at its Australian manufacturing unitGM will cut 500 jobs, or about 12% of its workforce, at itsAustralian plant because of a sharp fall in demand for itslocally-made "Cruze" small car.Source: The Wall Street Journal, April 8, 2013As GM cuts its workforce, how will the marginal product andaverage product of a worker change in the short run?Suppose that before the cuts the marginal product of GMworkers is below their average product.As the number of workers decreases, the marginal product ofa GM workerand the average product of a GM workerin the short run.increases; decreasesdoes not change; does not changedecreases; decreasesincreases; increasesdecreases; increases

As General Motors (GM) cuts 500 jobs at its Australian manufacturing unit due to a sharp fall in…

Answered: As the number of workers decreases, the…

As the number of workers decreases, the marginal product of a GM worker and the average product of a GM worker in the short run.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 8P

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Question

GM cuts jobs at its Australian manufacturing unit
GM will cut 500 jobs, or about 12% of its workforce, at its
Australian plant because of a sharp fall in demand for its
locally-made "Cruze" small car.
Source: The Wall Street Journal, April 8, 2013
As GM cuts its workforce, how will the marginal product and
average product of a worker change in the short run?
Suppose that before the cuts the marginal product of GM
workers is below their average product.
As the number of workers decreases, the marginal product of
a GM worker
and the average product of a GM worker
in the short run.
increases; decreases
does not change; does not change
decreases; decreases
increases; increases
decreases; increases

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