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Question: Let x = f(L) be the output when L units of labour are used as input. Assume that f(0) = 0, f'(L) > 0, and f"(L) < 0 for L > 0. Average productivity is g(L) = f (L)/L.
(a) Let L∗ > 0. Indicate on a figure the values of f(L∗) and g(L∗). Which is the larger?
(b) How does the average productivity change when labour input increases?
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