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Review_Questions_for_Marginal_Product_Ma_Sol

# Review_Questions_for_Marginal_Product_Ma_Sol - e If MP is...

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d44bcd0bdd0a74bd5da13684ca6cbf028c772088.doc 1 1. Len’s body board factory rents equipment and shaping boards and hires students. Table 1  shows Len’s total product schedule. Table 1 L (workers per day) Total Product (body boards per day) Marginal  Product Average  Product 0 0 1 20 20 20 2 44 24 22 3 60 16 20 4 72 12 18 5 80 8 16 6 84 4 14 7 86 2 12.3 a) Construct Len’s marginal product and average product schedules. b) Marginal returns increase for the first 2 workers. c) Marginal returns decrease after the second worker is hired. d) The point of decreasing marginal returns on the marginal product curve occurs at 2  workers, where marginal product is at a maximum 2. Fill in the blanks for the following:  a) If MP is rising (and is positive), then TP is  increasing       at a(n)  increasing  rate. b) If MP is falling (and is positive), then TP is  increasing  at a  decreasing  rate. c) If MP is zero, then TP is at its  maximum . d) If MP is negative, then TP is  falling

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Unformatted text preview: . e) If MP is greater than AP, then AP must be rising . f) If MP is less than AP, then AP must be falling . g) The point of decreasing marginal returns occurs when the marginal product curve is at a maximum. Continued on the next page…. . d44bcd0bdd0a74bd5da13684ca6cbf028c772088.doc 2 Question 3 pertains to Diagram 1 that shows total product for a sweater factory. Diagram 1 3. Decreasing returns begin when the _third worker___ is hired. The marginal product of the second worker is 6. 4. Use Table 2 to answer Question 4. Table 2 shows the costs incurred at Pete’s Peanut Farm. Complete Table 2: Table 2: Pete’s Peanut Farm L TP TVC TC AFC AVC ATC MC 100 1 10 35 135 10 3.50 13.50 3.50 2 24 70 170 4.17 2.91 7.08 2.50 3 38 105 205 2.63 2.76 5.39 2.50 4 44 140 240 2.27 3.18 5.45 5.83 5 47 175 275 2.13 3.72 5.85 11.67...
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