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Basic Question 3 of 13

Which statement(s) is (are) true? An increase in productivity ______

I. shifts the marginal product and cost curves upward.
II. shifts the marginal product and cost curves downward.
III. shifts the average product and cost curves upward.
IV. shifts the average product and cost curves downward.
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User Contributed Comments 8

User Comment
Sabs Does this not depend on where you are in the curve? If diminishing marginal returns then cost curves move upwards
AUAU tricky Q.
boddunah good one. tricky. chose ii as an answer ,but wrong. thought it was marginal cost and average cost. did not look at "product" part in marginal product.
indrasenareddy can some one please eleaborate.

Marginal product sounds very abstract. can it be equated with marginal revenue. what is diff btw productivity and marginal product.
JohnnyWu Knew something wasn't right.
thekobe the relationship between marginal product and cost curves is inverse, thus none of the answers makes sense
kondagadu they should alteast have the option none of the above to reflect the choices we get in the exam
schweitzdm kondagadu, I believe there are no questions on the CFA exam that have answers such as "all of the above" or "none of the above." (Someone please correct me if I'm mistaken!)

This is a basic question. For questions that are more like the exams, check the 'review question' area.
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Your review questions and global ranking system were so helpful.
Lina

Lina

Learning Outcome Statements

determine and interpret break even and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect competition

CFA® 2025 Level I Curriculum, Volume 1, Module 1.