Question

4. A commercial fisherman observes the following relationship between the hours spent fishing and the number of fish he fishes. It organizes them into a table: Fishing hours Amount of fish (pounds) 110 28 30 1. What is the marginal product of the fisherman? 2. Graph the production function and explain its shape. 1. Further research reveals that the fisherman has a fixed cost of $10 and its opportunity cost is $5 per hour. Present the fisherman's total cost curve plot and explain its shape.

Answer 1

1.

hour	fish	mp	FC	opportunity cost	total cost
0	0		10	0	10
1	10	10	10	5	15
2	18	8	10	10	20
3	24	6	10	15	25
4	28	4	10	20	30
5	30	2	10	25	35

explanation:

Marginal product(mp)= change in the quantity / change in the hour

2.

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the total product of the fisher is increasing as hour increasing so, total cost is upward sloping curve but marginal product curve is downward sloping because total product increasing but the marginal product with one more extra hour is decreasing. this is called the law of diminishing marginal productivity.

3.

total cost total cost 0 1 2 3 4 5

explanation:

here the fixed cost is $10 which will remain same for the any level of production but the opportunity cost will change with the output so per hour opportunity cost will change. total cost is summation of the fixed plus opportunity cost. so total cost will be increase at output is increase with the rate of variable cost increase so, the total cost curve is upward sloping.