Course: Microeconomics - Theory of ProductionA field produces wheat. Land is a fixed factor, so the annual harvest depends on the number of hired workers. The following table shows the production of the farm measured in quintals per year. Workers12345678910Total Product (TP)125??7259251.1251.2751.2751.1751.000Average Product (AP)?150??185184175160131100Marginal Product (MP)??200?20018012050-100-175We ask:1) Fill in the missing spaces in the table.2) The farmer can hire workers for w (salary) = 1,200,000. The price per quintal of wheat is $10,000. How many workers should she hire and why?3) Suppose now that the price is COLLECTIVE OWNERSHIP and no wages are paid, but production is shared equally among those who produce it. How many members should be accepted in the COOPERATIVE if the welfare of the participants is to be maximized?

1. Before we fill in the blanks in the table, we should know the definitions and relations between…

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ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Course: Microeconomics - Theory of Production
A field produces wheat. Land is a fixed factor, so the annual harvest depends on the number of hired workers. The following table shows the production of the farm measured in quintals per year.

Workers	1	2	3	4	5	6	7	8	9	10
Total Product (TP)	125	?	?	725	925	1.125	1.275	1.275	1.175	1.000
Average Product (AP)	?	150	?	?	185	184	175	160	131	100
Marginal Product (MP)	?	?	200	?	200	180	120	50	-100	-175

We ask:

1) Fill in the missing spaces in the table.

2) The farmer can hire workers for w (salary) = 1,200,000. The price per quintal of wheat is $10,000. How many workers should she hire and why?
3) Suppose now that the price is COLLECTIVE OWNERSHIP and no wages are paid, but production is shared equally among those who produce it. How many members should be accepted in the COOPERATIVE if the welfare of the participants is to be maximized?

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