Question

The following data in the table below represents the relationship between the number of workers and their outputs in a company for a given day in the short-run:  

Workers	Output P	Marginal Product MP	Variable Cost VC	Fixed Cost FC	Total Cost TC	Average Variable Cost AVC	Average Fixed Cost AFC	Average Total Cost TC	Marginal Cost MC
0	0		0
1	12		2
2	21		6
3	27		12
4	30		35
5	32		80
6	33		160

Q1

Fill in the column of marginal products. How might you explain it? (Use a graph).

Q2

The company has fixed cost (FC) of $150. Use this information to fill in the column for total cost (TC). (Use a graph to discuss all types of cost)

Q3

Fill in the column for average variable cost (AVC), average fixed cost (AFC) and average total cost (ATC). Explain why average total cost (ATC) takes U-shape. (Use a graph)

Q4

Fill in the column for marginal cost (MC). Does it increase or decrease? Why?

Q5

Compare the data in the two columns of marginal cost (MC) and marginal product (MP). Explain the relationship between both of them. (Use a graph)

                                              

Q6

Compare the data in the two columns of marginal cost (MC) and average variable cost (AVC). Explain the relationship between both of them. What is the amount of output at efficient scale? (Use a graph)          

Answer 1