The table below refers to the next two questions: Units of Labor Units of Output

Question

The table below refers to the next two questions: Units of Labor Units of Output 10 25 35 43 31. What is the marginal physical product of the second unit of labor? (a) 10. (b) 15. (c) 25. (d) 5. 2. With which unit of labor do diminishing marginal returns first appear? (a) the first (b) the second (c) the third (d) the fourth For a given range of production, the extra product of each additional worker is smaller than the extra product of the worker hired just before. This statement describes: 33. (a) constant returns (b) negative returns (c) diminishing returns (d) increasing returns (e) average returns 34· The addition to total output resulting from employing one more worker is: (a) average product (b) input (c) total product (d) marginal product (e) a production function 35. In the short run: (a) all of the firm's outputs are variable (b) none of the firm's outputs are variable (c) the time period always covers one year (d) technically efficient production is not possible (e) at least one of the firm's inputs cannot be varied

Explanation / Answer

31. b.

Marginal Physical Product for 2nd unit = Change in total Product between second and first unit/ Change in labor

MPl = (25-10) / (2-1) = 15

33. c. Diminishing returns. Each additional unit of labor leads to increase in output by a smaller unit when diminishing returns set in.

34. d. Marginal product is the change in total output per unit change in labor.

35. e. In short run, at least one input is variable which is dependent on quantity of output while in long run all inputs are variable.

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