▪You have fulfilled your dream by buying a McDonald’s franchise. You start hiring employees and come to realize that the first employees you hired were extremely productive, but every additional person you hired seemed to be less productive. ▪Why does that occur? Are the last people you hired just lazy? ▪The capital is fixed in the short run, but you can change your labor in the short run.▪You decide to calculate the marginal product and the average product of your business. Directions to create a Line chart, in the Scenario 4Excel Worksheet, of a Total Product curve.Step 1: Highlight the Labor and Total Product columns.Step 2: Under Insert, click Recommended Charts and1. Create a Linechart, in the Scenario4 Excel Worksheet,of a Total Productselect Line.Step 3: Click on the title "Q (Total Product)" and change itto "Total Product"Step 4: Click on Chart Design, then Add Chart Element,curve.and then Axis Titles – Primary Vertical. Vertical axisshould be titled “Output"Step 5: Click on Add Chart Element and then Axis Titles –Primary Horizontal. Horizontal axis should be titled"Labor" AВCDEF1 L (Labor)Q (Total Product)MP (Marginal Product) AP (Average Product)1104230360410071308.6.15071681081841191891210190131118714121801516171. Explain when increasing returns occurs.181920 Explain when diminishing marginal returns occurs.212223 Explain when negative marginal returns occurs.2425

This occurs due to the Law of Diminishing Returns. According to this law, as more and more units of…

Answered: You have fulfilled your dream by buying…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

▪You have fulfilled your dream by buying a McDonald’s franchise. You start hiring employees and come to realize that the first employees you hired were extremely productive, but every additional person you hired seemed to be less productive.

▪Why does that occur? Are the last people you hired just lazy?

▪The capital is fixed in the short run, but you can change your labor in the short run.

▪You decide to calculate the marginal product and the average product of your business.

Directions to create a Line chart, in the Scenario 4
Excel Worksheet, of a Total Product curve.
Step 1: Highlight the Labor and Total Product columns.
Step 2: Under Insert, click Recommended Charts and
1. Create a Line
chart, in the Scenario
4 Excel Worksheet,
of a Total Product
select Line.
Step 3: Click on the title "Q (Total Product)" and change it
to "Total Product"
Step 4: Click on Chart Design, then Add Chart Element,
curve.
and then Axis Titles – Primary Vertical. Vertical axis
should be titled “Output"
Step 5: Click on Add Chart Element and then Axis Titles –
Primary Horizontal. Horizontal axis should be titled
"Labor"

A
В
C
D
E
F
1 L (Labor)
Q (Total Product)
MP (Marginal Product) AP (Average Product)
1
10
4
2
30
3
60
4
100
7
130
8.
6.
150
7
168
10
8
184
11
9
189
12
10
190
13
11
187
14
12
180
15
16
17
1. Explain when increasing returns occurs.
18
19
20 Explain when diminishing marginal returns occurs.
21
22
23 Explain when negative marginal returns occurs.
24
25

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