John makes 2 pizzas and then we add Eric and he makes 1 pizza. Each of them is paid $10.
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Average Product
Ten units of labour are hired and the resulting average product is 50 units.
Average and Marginal Product
If a firm is at a point where MP=8 and AP=5 then an increase in one unit of labour will
If a firm is at a point where MP=3 and AP=5 then
Which of the following about average product and marginal product is always true?
Numbers listed are units of output for each combination of labour and plant size
If this firm is in short run and has plant size 4, what is its average product of labour when it employs 5 units of labour?
As the quantity of labour employed increases,
When there is technological advancement,
When 4 units of labour are hired, total output is
Which of the following are always true? (more than one answer can be true!)
Marginal product and average product curves will shift up if
Practice: Marginal Product
a) When 5 units of labour are employed, the marginal product is ________
b) ___True___False marginal product is constant for all levels of labour. ________
c) When 8 units of labour are employed, the average product is ________
Use the chart above to answer the following questions
If the firm changes from 4 units of labour and 2 plants to 5 units of labour and 4 plants, the average product per unit of labour
Practice: Marginal vs Average Product
Which of the following statements about the relationship between marginal product and the average product is correct?
When marginal product is rising, which of the following is true?
Your business has 15 units of labor and the current output of milkshakes is 150 units. You hire one more unit of labor and the output increases to 155 milkshakes. What will happen?
Fixed and Variable Costs
In the long run
In the short-run capital is ___________ and labour is ___________ while in the long-run capital is ___________ and labour is ___________.
Which of the above curves is the marginal product curve?
In the short run, a firm can vary
Suppose Thor's hammer makers increases its output from 20 to 25 hammers. Its total cost increase from $500 to $750. What is the the company's marginal cost of producing a hammer?
True/False:
In the short run
.
Practice Question
Tony sells furniture. He pays $1,200 month to rent a warehouse and has a 3 year lease. Each day he has one friend Jerry whom he pays $100 to help him sell the furniture. Jerry sells on 200 units of furniture a month.
What is the fixed cost for one month?
What is the variable cost per month?
When average total cost is falling, marginal cost must be
Factors of Production
The factors of production are