Question

ACTIVITY 3

Fill in the table below.

Capital	Total Product	Marginal Product	Average Product
0	0	------------------	-----------------
1	20
2	50
3	90
4	136
5	170
6	198

At what amount of capital do we see diminishing marginal returns?

Fill in the table below.

Capital	Total Product	Marginal Product	Average Product
0	0	--------------------	------------------
1	45
2		65
3			58
4	224
5		36
6			48

At what amount of capital do we see diminishing marginal returns?

Fill in the table below.

Capital	Total Product	Marginal Product	Average Product
0	0	-------------	----------------
1	100
2	240
3	420
4	580
5	700
6	780

At what amount of capital do we see diminishing marginal returns?

Fill in the table below

Capital	Total Product	Marginal Product	Average Product
0	0	------------	----------------
1	150
2		160
3			160
4	680
5		140
6			145

At what amount of capital do we see diminishing marginal returns?

Answer 1

3. The table would be as below.

Capital	Total Product	Marginal Product	Average Product
0	0	-	-
1	20	20	20
2	50	30	25
3	90	40	30
4	136	46	34
5	170	34	34
6	198	28	33

The marginal product is change in the total product for a unit change in the input. The average product is the total product divided by the input.

The marginal product is highest at when K=4, and the diminishing return starts afterwards. Hence, diminishing returns can be seen at when K=5.

The second table would be as below.

Capital	Total Product	Marginal Product	Average Product
0	0	-	-
1	45	45	45
2	110	65	55
3	174	64	58
4	224	50	56
5	260	36	52
6	288	28	48

The marginal product is highest at when K=2, and the diminishing return starts afterwards. Hence, diminishing returns can be seen at when K=3.

The third table would be as below.

Capital	Total Product	Marginal Product	Average Product
0	0	-	-
1	100	100	100
2	240	140	120
3	420	180	140
4	580	160	145
5	700	120	140
6	780	80	130

The marginal product is highest at when K=3, and the diminishing return starts afterwards. Hence, diminishing returns can be seen at when K=4.

The fourth table would be as below.

Capital	Total Product	Marginal Product	Average Product
0	0	-	-
1	150	150	150
2	310	160	155
3	480	170	160
4	680	200	170
5	820	140	164
6	870	50	145

The marginal product is highest at when K=4, and the diminishing return starts afterwards. Hence, diminishing returns can be seen at when K=5.