Question

Question 6 S L 1 pts Table 13-5 Number of Output Workers 0 0 1 1 ,000 2 2 ,000 S32,700 4 3 ,200 5 3 ,500 6 3 ,600 Refer to Table 13-5. Assume that fixed costs are $500, and variable costs are $100 per worker. For this firm, what are the shapes of the production function and the total cost curve? The production function is increasing at a decreasing rate, whereas the total cost function is increasing at an Increasing rate. The production function is increasing at an increasing rate, whereas the total cost function is increasing at a decreasing rate. Both the production function and total cost curve are increasing at an increasing rate. Both the production function and total cost curve are increasing at a decreasing rate.

Answer 1

6) From the diagram given below, we can see that production function is increasing at an decreasing rate while cost function is rising at an increasing rate. Thus option A is correct.

Worker	Output	Total cost
0	0	500
1	1000	600
2	2000	700
3	2700	800
4	3200	900
5	3500	1000
6	3600	1100

4000 3500 3000 2500 2000 1500 1000 500 1 2 3 5 6 Quantity of worker Output Total cost Total/Marginal product LO

5) Marginal output = Total output_n - Total output_(n-1)

Worker	Output	Marginal Output
0	0	-
1	20	20
2	45	25
3	60	15
4	70	10

From the table given above, we can see that marginal product for the 2nd worker is 25 students. Thus option A is correct.

4) Here total product is rising initially at increasing rate and after 2 workers it is rising at decreasing rate which cause diminishing marginal product of workers making option B correct.