1. The data below show the relationship between number of workers hired and cost and revenue for a small, competitive farm in Alberta.
Number of workers
Marginal product of labour
Value of marginal product of labour
a. Complete the columns of marginal product of labour, value of marginal product of labour, and marginal profit. (3 marks)
b. If the farm above decided to maximize its profit, how many workers would it hire? Explain your answer. (2 marks)
c. Given the results from question (b) above, let's assume the above farm has now a fixed cost of $10, and labour is the only variable factor. What is the farm's profit? Show your calculation. (3 marks)
d. At what point do diminishing returns set in for the farm above? Explain. (3 marks)
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