Question

Scenario: Selma runs a pastry shop. The following table shows the total number of cupcakes produced as a function of the number of hours of labor put into making them. Hours of Labor 0 1 2 3 4 5 Cupcakes 0 10 25 35 44 52 58 Refer to the scenario above. At which hour of labor does Diminishing (Marginal) Returns first start? 2nd 6th 3rd 4th

Answer 1

Answer

the marginal product of n-th worker =total output of n workers - the total output of n-1 workers
MP(n)=TP(n)-TP(n-1)
MP(1)=10-0=10
MP(2)=25-10=15 and so on

Hours	Cupcakes	MP
0	0
1	10	10
2	25	15
3	35	10
4	44	9
5	52	8
6	58	6

the diminishing marginal return set in as the marginal product decreases.

the MP decreases as the 3rd hour set in

Option 3

3rd hour