ECO 550 Assignment 1

ECO 550 Assignment 1 - three stages of production and...

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Assignment 1 Complete the table (Table 1) below, then draw the following curves: Short-run average product (AP) curve; Short-run marginal product (MP) curve. Table showing the Average and Marginal product of labour for a hypothetical firm Amount of labour( units) Amount of capital(No. of machines) Output of parts(Q, hundreds of parts) Average product (Q/L) Marginal product(∆Q/∆L) 0 5 0 - - 1 5 49 49 49 2 5 132 66 83 3 5 243 81 111 4 5 376 94 133 5 5 525 105 149 6 5 684 114 159 6.6 5 792.59 120 164 7 5 847 121 163 8 5 1008 126 161 9 5 1161 129 153 10 5 1300 130 139 11 5 1419 129 119 12 5 1512 126 93 13 5 1573 121 61 14 5 1596 114 23 14 5 1575 105 -21 Use the information from the completed table and the graphs to identify the
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Unformatted text preview: three stages of production and explain why the firm’s short run production has only one ‘rational’ stage of production. The three stages are identifiable within the curve above. In the first stage, we see a rapid increase in growth, however that growth does slow down and at that point we are at stage 2. The slow down of growth continues until hit reaches the plateau. Once it reaches that plateau, we are at stage 3 and see a decline in productivity....
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This note was uploaded on 06/04/2011 for the course ECO 550 taught by Professor Gooding during the Spring '09 term at Strayer.

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