Question

Question 3

Answer the question on the basis of the following information.  

Number of Workers	Total Product	Marginal Product
0	0	---
1	8	8
2		10
3	25
4	30
5		3
6	34

The marginal product of the fourth worker

is 7¹/₂.

is 7.

is 5.

cannot be calculated from the information given.

Question 4

At any level of output.

		average variable cost will exceed average fixed cost by the level of average total cost.
		average variable cost will exceed average total cost in the short run.
		average total cost will exceed average variable cost by the level of average fixed cost.
		marginal cost will exceed average variable cost by the level of average fixed cost.

Question 6

Other things equal, if the wage rates paid to a firm's labor inputs were to rise, we would expect the

		AFC, AVC, ATC, and MC curves all to rise.
		MP curve to fall.
		AFC and ATC curves to fall.
		AVC, ATC, and MC curves all to rise.

Question 8

If the total variable cost of 9 units of output is $90 and the total variable cost of 10 units of output is $120, then

		the average variable cost of 10 units is $10.
		the firm is operating in the range of increasing marginal returns.
		the marginal cost of the tenth unit is $90.
		the average variable cost of 9 units is $10.

Answer 1

3.

L	TP= summation of MP	MP= change in TP
0	0	-
1	8	8
2	18	10
3	25	7
4	30	5
5	33	3
6	34	1

The marginal product of the fourth worker is 5.

4. ATC=AFC +AVC . Therefore, at any level of output,average total cost will exceed average variable cost by the level of average fixed cost. Hence, option(C) is correct.

6. Other things equal, if the wage rates paid to a firm's labor inputs were to rise, we would expect the AVC, ATC and MC curve all to rise. Hence, option(D) is correct.

8. When Q= 9 units , TVC= $90

When Q=10 units , TVC= $120

When Q=10 units, AVC=TVC/Q = 120/10= $12

Marginal cost of the tenth unit = $(120-90)= $30

When Q=9 units ,Average variable cost = $(90/9)= $10.

Hence, option(D) is correct.