Question 3: The data in the table below represents Total product (TP), for an agri-business involved in potato production. Capital (fixed factor) Labor (variable factor) Output(units) or Total physical product (TPPL) Average physical product (APPL) Marginal physical product (MPPL) 10 0 0 10 1 7 10 2 20 10 3 39 10 4 55 10 5 66 10 6 70 10 7 70 10 8 67 Calculate the marginal product and average product value. At what point do diminishing marginal returns set in? And using the values of AP and MP obtained from part (i), plot the graphs of TP, AP and MP being careful to fully label the graph and explain briefly the law of diminishing marginal returns from your computation.
Question 3: The data in the table below represents Total product (TP), for an agri-business involved in potato production. Capital (fixed factor) Labor (variable factor) Output(units) or Total physical product (TPPL) Average physical product (APPL) Marginal physical product (MPPL) 10 0 0 10 1 7 10 2 20 10 3 39 10 4 55 10 5 66 10 6 70 10 7 70 10 8 67 Calculate the marginal product and average product value. At what point do diminishing marginal returns set in? And using the values of AP and MP obtained from part (i), plot the graphs of TP, AP and MP being careful to fully label the graph and explain briefly the law of diminishing marginal returns from your computation.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 3:
The data in the table below represents Total product (TP), for an agri-business involved in potato production.
|
Capital (fixed factor) |
Labor (variable factor) |
Output(units) or Total physical product (TPPL) |
Average physical product (APPL) |
Marginal physical product (MPPL) |
|
|
|
|
|
|
|
10 |
0 |
0 |
|
|
|
10 |
1 |
7 |
|
|
|
10 |
2 |
20 |
|
|
|
10 |
3 |
39 |
|
|
|
10 |
4 |
55 |
|
|
|
10 |
5 |
66 |
|
|
|
10 |
6 |
70 |
|
|
|
10 |
7 |
70 |
|
|
|
10 |
8 |
67 |
|
|
- Calculate the marginal product and average product value.
- At what point do diminishing marginal returns set in? And using the values of AP and MP obtained from part (i), plot the graphs of TP, AP and MP being careful to fully label the graph and explain briefly the law of diminishing marginal returns from your computation.
- How does the hypothesis of diminishing returns (MP& AP) influence the behaviour of costs (MC& AC)?
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