Suppose that in her first hour of work, Lynn can hand-knit four pairs of mittens. During her second consecutive hour, Lynn can hand-knit three additional pairs of mittens, and during her third hour of work, as a consequence of fatigue, she can hand-knit only one additional pair. Suppose that she works for up to three hours and makes a wage of $15 per hour.
a. Create a table relating the number of hours worked to the total number of pairs of mittens produced, and graph the total product curve for the production of pairs of mittens. Label clearly.
b. Looking at labor costs only (ignoring, for the purposes of this exercise, the cost of the yarn that she uses and any fixed costs), make a table relating costs to the number of pairs of mittens produced. Graph the total (labor) cost curve for the production of mittens. Label clearly.
c. How would you describe in words the pattern of marginal returns? The pattern of marginal costs?
d. What is the marginal product, in pairs of mittens per hour, of her second hour of work? Of her third hour of work?
e. What is the marginal cost, in dollars per pairs of mittens, as she goes from an output of four pairs of mittens to an output of seven pairs of mittens? What is the marginal cost of the eighth pair of mittens?