Question

David decides to open a bakery serving fresh bagels. The table below displays the labor and production of bagels. 14. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers David's Labor and Production Costs 0.27 points Total Average Marginal (workers) Product Product Product Labor 50 110 150 160 50 50 60 50 48 32 Print 10 150 a. Complete the missing cells in the table above. b. When David hires a second worker, he experiences: O increasing marginal returns. O diminishing marginal returns. O constant marginal returns. C. When David hires a fifth worker, he experiences: O diminishing marginal returns. O increasing marginal returns. O constant marginal returns.

Answer 1

Total Product (TR) is the total amount of output produced in an economy in the given period.

Average Product (AP) is the product per unit of input hired and can be calculated as follows:

\((\mathrm{AP})=\frac{\text { Total Product }}{\text { Total number of inputs employed }}\)

Marginal Product (MP) is the change in total product when an additional unit of input is employed. It can be calculated by differentiating the total product function, as follows:

$$ \text { Marginal Product }(\mathrm{MP})=\frac{\delta T P}{\delta L} $$

a.

Use the above information to fill the table as follows:

Therefore, the table with the final values are:

b.

When the second worker is hired, marginal product increases from 50 to 60 . Therefore, David is experiencing increasing marginal returns.

Therefore, the correct answer is option A: Increasing marginal returns.

c.

When the fifth worker is hired, marginal product decreases from 10 to 0 . Since Therefore, David is experiencing decreasing marginal returns.

Therefore, the correct answer is option A: Diminishing marginal returns.