Question 1: Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below.
|
Number of
Worker Hours
|
Output
|
Marginal Product
|
Fixed
Cost
|
Variable
Cost
|
Total
Cost
|
Marginal
Cost
|
Average
Variable
Cost
|
Average
Total
Cost
|
|
0
|
0
|
--
|
|
|
20,000
|
--
|
--
|
--
|
|
50
|
400
|
|
|
|
20,250
|
|
|
|
|
100
|
900
|
|
|
|
20,500
|
|
|
|
|
150
|
1300
|
|
|
|
20,750
|
|
|
|
|
200
|
1600
|
|
|
|
21,000
|
|
|
|
|
250
|
1800
|
|
|
|
21,250
|
|
|
|
|
300
|
1900
|
|
|
|
21,500
|
|
|
|
|
350
|
1950
|
|
|
|
21,750
|
|
|
|
Question 2:
|
Number Of Workers
|
Output
|
|
0
|
0
|
|
1
|
50
|
|
2
|
110
|
|
3
|
300
|
|
4
|
450
|
|
5
|
590
|
|
6
|
665
|
|
7
|
700
|
|
8
|
725
|
|
9
|
710
|
|
10
|
705
|
The table above shows the weekly relationship between output and number of workers for a factory with a fixed size of plant.
a. Calculate the marginal product of labor.
b. At what point does diminishing returns set in?
c. Calculate the average product of labor.
d. Find the three stages of production.