Refer to the table shown here. The average total cost of 5 units of output is: $

Question

Refer to the table shown here. The average total cost of 5 units of output is:

$8.

$10.

$29.

$39.
Total Product (Q): 0 1 2 3 4 5 6
Total Cost (TC): $50 $80 $105 $125 $155 $195 $250
Refer to the table shown here. Diminishing marginal returns are incurred when output is increased from:

1 to 2 units of output.

2 to 3 units of output.

3 to 4 units of output.

4 to 5 units of output.
Refer to the table shown here. What is the total product when 2 hours of labor are employed?
Refer to the table shown here. What is the marginal product of the third hour of labor?

60

80

100

240
The following is a hypothetical short-run production function:
Hours of Total Marginal
Labor Product Product
0 ___ ___
1 100 100
2 ___ 80
3 240 ___
Refer to the table shown here. What is the average product of the first three hours of labor?

60

80

100

240

Explanation / Answer

Q1. Answer is $ 39 Explanation: Output TC FC VC AVC ATC 0 50 50 0 0 50 1 80 50 30 30 80 2 105 50 55 27.5 52.5 3 125 50 75 25 41.67 4 155 50 105 26.25 38.75 5 195 50 145 29 39 6 250 50 200 33.33 41.67 Q2. Answer is 3 and 4 units Explanation: Output TC FC VC AVC 0 50 50 0 0 1 80 50 30 30 2 105 50 55 27.5 3 125 50 75 25 4 155 50 105 26.25 5 195 50 145 29 6 250 50 200 33.33 As AVC start rising from 4th unit, therefore diminishing returns applicable from 3 and 4 units Q3. Total product of 2 hours: Answer is 180 Explanation: Hours TP MP AP 0 0 0 0 1 100 100 100 2 180 80 90 3 240 60 80 Q4. Marginal product for 3rd hour Answer is 60. Explanation: Hours TP MP AP 0 0 0 0 1 100 100 100 2 180 80 90 3 240 60 80 Q5. Average product for 3 hours of labour Answer is 80 Explanation: Hours TP MP AP 0 0 0 0 1 100 100 100 2 180 80 90 3 240 60 80

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