The table below shows the total production of a firm as the quantity of labor employed increases. The quantities of all other resources employed are constant. Compute the marginal and average products and enter them in the table.
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(a) At what levels are there increasing returns to labor and at what levels are there decreasing returns to labor?
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(b) Describe the relationship between the total product and marginal product.
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(c) Describe the relationship between marginal and average product.
B)
For the following three cases, use a midpoints formula to calculate the coefficient for the cross elasticity of demand and identify the type of relationship between the two products.
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(a) The quantity demanded for product A increases from 30 to 40 as the price of product B increases from $0.10 to $0.20.
Elasticity: ______ Relationship: ________________
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(b) The quantity demanded for product A decreases from 3000 to 1500 as the price of good B increases from $5 to
$10.
Elasticity: ______ Relationship: ________________ -
(c) The quantity demanded for product A remains 400 units as the price of product B increases from $25 to $30. Elasticity: ______ Relationship: ________________
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