During recessions, American firms lay off a larger proportion of their workers than Japanese firms do. (It has been claimed that Japanese firms continue to produce at high levels and store the output or sell it at relatively low prices during the recession.) Would you expect the average product of labor to be higher in Japan or the United States? Why? Assume that the production function remains unchanged over a period that is long enough to include many recessions and expansions, that Japanese and American firms have identical production functions, and that Japan and the U.S. produce using the same ratio of factors during good times.

The additional output produced through hiring an extra item of such an input reflects the marginal product (MP). For the very first time. for example, its marginal labor productivity was increased output generated by recruiting additional work.

This law diminishing marginal returns as more as units that even the marginal result of even an input, that is hired input.

In other words, any additional work input would generate less than a previous employee because recruiting additional workers decreases expected revenue on jobs, the laid-off of employees, which means the Labor would grow expected revenue.

In Japan is laying off fewer employees even despite the slowdown it continues to produce strong outputs. The lower-priced revenues and their work remain constant along with their steady overall performance.

Your medium product (total) item divided by total work would stay intact. United states staff layover to the other side. It laid-off the staff equals higher marginal labor for overall returns it's going to be higher production besides that, lower labor in the United States could mean an increase in the gross labor output but a larger for Japan, more then, that's why the choice a is correct.