Question

Question 1) In table 1, Calculate the marginal product of labor and average product of labor.

Table 1: Surfboard Production

Labor (workers per week)	Total Product (surfboards per week)	Marginal Product	Average product
0	0	-	-
1	30
2	70
3	120
4	160
5	190
6	210
7	220

Question 2) Surfboard Production Costs

  

Labor (workers per week)	Total Product (surfboards per week)	TFC (SAR per surfboard)	TVC	TOTAL COST	AFC	AVC	ATC	MC
0	0	3000	0		-	-	-	-
1	30	3000	3000
2	70	3000	3500
3	120	3000	4000
4	160	3000	4500
5	190	3000	5000
6	210	3000	5500
7	220	3000	6000

1. Fill in the missing numbers from Table above for Total Fixed Costs (TFC), Total Costs (TC), Marginal Costs (MC), Average Variable Costs (AVC), Average Fixes Costs (AFC) and Average Total Costs (ATC).

Answer 1

1.Ans:

Labor (workers per week)	Total Product (surfboads per week)	Marginal Product	Avearge Product
0	0	--	--
1	30	30	30
2	70	40	35
3	120	50	40
4	160	40	40
5	190	30	38
6	210	20	35
7	220	10	31.43

Explanation:

Marginal Product = Change in total product / Change in number of workers

Average Product =  Total product / Number of workers

2.Ans:

Labor (workers per week)	Total Product (surfboads per week)	TFC ( SAR per surfboard)	TVC	TOTAL COST	AFC	AVC	ATC	MC
0	0	3000	0	3000	--	--	--	--
1	30	3000	3000	6000	100	100	200	100
2	70	3000	3500	6500	42.86	50	92.86	12.5
3	120	3000	4000	7000	25	33.33	58.33	10
4	160	3000	4500	7500	18.75	28.13	46.88	12.5
5	190	3000	5000	8000	15.79	26.32	42.11	16.67
6	210	3000	5500	8500	14.29	26.19	40.48	25
7	220	3000	6000	9000	13.64	27.27	40.91	50

Explanation:

Total Cost = TFC + TVC

AFC = TFC /Q

AVC = TVC / Q

ATC = TC / Q

MC = Change in TC / Change in Q