uestion 1 35 out of 35 points The following table shows the total output (units)
ID: 1122150 • Letter: U
Question
uestion 1 35 out of 35 points The following table shows the total output (units) produced with yarious levels of labor and each of two levels of capital: Labor (units) 1 2 3 4 Capital 2 units 20 50 70 80 Capital 4 units 40 100 140 160 Fill in Multiple Blanks If rounding is required, round your answer to the whole number (i.e., do not show the decimal places) Enter the numerical value only, do not enter any symbols ($, %, etc.). When capital is fixed at 2 units, (a) AP decreases after the [a] (enter first, second, third, fourth) unit of labor (b) MP decreases after the [b] (enter first, second, third, fourth) unit of labor, (c) at L = 4, AF = [c] units and MP = [d] units (d) Assume the wage rate of labor is $200. As labor is increased from 1 to 2 units, AVC te] (enter rises,falis) from SIf1 to S[gl-Explanation / Answer
Answer - We have given a table below,
If capital is fixed at 2 units.
(a) Average product of labor is the ratio of output and labor units. AP of labor is given below,
AP1 = 20/1 = 20
AP2 = 50/2 = 25
AP3 = 70/3 = 23.33
AP4 = 80/4 = 20
We can see that AP started falling from third units of labor. Thus Answer would be ''Third Unit.''
(b) Marginal Product of labor is the change in total output by employing an additional unit of labor. MP of different labor unit is given below.
MP1 = (20 - 0) = 20
MP2 = (50 - 20) = 30
MP3 = (70 - 50) = 20
MP4 = (80 - 70) = 10
We can see here that MP start declining from third unit of labor. Thus answer would be third unit.
(C) When, L = 4 then AP = 80/4 = 20 units
MP4 = 80 -70 = 10 units
(d) The wage rate of labor is $200. As labor increased from 1 to 2 units , AVC falls from $10 to $8.
When 1 unit of labor used then TVC = 1 * 200 = 200
AVC1 = 200 / 20 (AVC = TVC / Q)
AVC1 = $10
When 2 unit labor is used then TVC = 2 * 200 = $400
AVC2 = 400/50 = $8
Labor (Units) 1 2 3 4 Capital = 2 units 20 50 70 80 Capital = 4 units 40 100 140 160Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.