Problem Set Hats WS.pdf - Name Team Short-Run Production Function for Tony’s Hat Store Quantity of Input(workers hired Total Product(Total hats

Problem Set Hats WS.pdf - Name Team Short-Run Production...

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Name: _________________________ Team: _________________________ Short-Run Production Function for Tony’s Hat Store Definitions: Total Product (TP)= total volume/amount of final output produced by a firm using given inputs in a given period of time Marginal Product (MP)= additional output produced asa result of employing an additional unit of the variable factor input Average Product (AP)= output per unit of factor inputs or the average of the total product per unit of input The Law of Diminishing Marginal Returns- at some point, adding an additional factor of production results in smaller increases in output Stage I: Increasing marginal returns MP increasing TP increasing Stage II: Decreasing marginal returns MP falling TP increasing Stage III: Negative marginal returns MP is negative TP decreasing Quantity of Input (workers hired) Total Product (Total hats produced) Marginal Product (additional hats from each worker) Average Product (hats per worker) 0 0 —- —- 1 10 10 10 2 25 15 12.5 3 45 20 15 4 60 15 15 5 70 10 14 6 75 5 12.5 7 70 -5 10
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Name: _________________________ Team: _________________________ Questions: 1. How many hats can three workers make?
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  • Fall '17
  • Roger Crispy
  • Economics, Marginal product, Economics of production, total product

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