Question

Question 3, a and b.

For a: complete the table by calculating the marginal product.

For b: construct 2 graphs: the total output curve and the marginal product curve. Identify at what point the law of diminishing marginal returns becomes evident.

You VVU UUDI 3. a. Construct the marginal product schedule for the production function data in the fol- lowing table. Total Output 0 Marginal Product Labor 9 82 1080

Answer 1

TPMPL BBW 600 O

Chart Title TP/MP 1 2 3 4 5 6 7 8 9 10 11 Labor TP -MPL

The increasing return arises from 0 units to 4 units of labor.

The diminishing marginal return sets in when MPL of starts decreasing. Hence It can be said GDP that diminishing marginal return sets in after 4th units of labor. When TP increases an increasing rate, the MPL increases, when TP increase at decreasing rate, the MPL decreases and when TP is maximum, the MPL is zero when TP starts decreasing, the MPL becomes negative.