Answered: A company produces children's toys. The…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A company produces children's toys. The manager noticed the connection between the number of employed workers and the quantity of toys produced per month, which are presented in the table of following:

a) In what period is this firm operating? Why? b) What is the average product when 5 workers are employed? c) What is the marginal product when 7 workers are employed? What does this value mean? d) Does the law of declining marginal income apply? If yes to which worker? e) In this production function do we have total declining revenues? If so, which worker happens? f) Graph the curves of total product (TP), marginal product (MP) and product average (AP).

No. of workers
Quantities of toys
10
10
1
300
2
700
3
1200
1800
14
5
2200
16
2400
17
2400
18
2200

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