Question

Additional quantity of output, added by an additional unit of input is known as _________.

• A. Marginal product
• B. Average product
• C. Total product
• D. Net Product

Hint:

In forestry, the marginal product of fertilizer application will eventually decline and turn negative if excessive amounts are applied, as over-fertilization can cause nutrient toxicity and damage the trees.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
In forest economics and production theory, understanding the relationship between inputs (such as labor, fertilizer, or water) and outputs (such as timber yield or biomass) is essential for optimizing resource allocation.

Step 2: Detailed Explanation:
Let us review the definitions of the economic production terms provided:
1. Marginal Product (MP): This is the change in total output that results from employing one additional unit of a variable input, while keeping all other inputs constant.
Mathematically, it is expressed as:
\[ MP = \frac{\Delta TP}{\Delta X} \]
where $\Delta TP$ is the change in total product, and $\Delta X$ is the change in input.
This concept is key to the Law of Diminishing Marginal Returns, which states that as more units of a variable input are added, the marginal product will eventually decrease.
2. Average Product (AP): This is the total output produced divided by the total number of input units used ($AP = \frac{TP}{X}$).
3. Total Product (TP): This is the overall quantity of output produced from a given set of inputs.
4. Net Product: This is the total output remaining after accounting for intermediate inputs or costs.

Step 3: Final Answer:
The additional output gained by using one more unit of input is the Marginal Product, corresponding to option (A).