Q.1. Pak surgical makes masks and then sells them on door to door. Here is the relationshipbetween number of workers and Pak surgical output in each day:WorkersMarginalProductAverage total Marginal costOutputTotal Costcost110403801101306.1407145a) Fill in the column of marginal products. What pattern do you see? How might you explain it?b) A worker costs $100 a day, and the firm has fixed costs of $200. Use this information to fill inthe column for total cost.c) Fill in the column for average total cost. What pattern do you see?d) Now fill in the column for marginal cost. What pattern do you see?e) Compare the column for marginal product and the column for marginal cost. Explain therelationship.f) Compare the column for average total cost and the column for marginal cost. Explain therelationship.2.

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Answered: Q.1. Pak surgical makes masks and then…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 8P

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Q.1. Pak surgical makes masks and then sells them on door to door. Here is the relationship between number of workers and Pak surgical output in each day:Workers Output Marginal ProductTotal Cost Average total costMarginal cost0 01 102 403 804 1105 1306 1407 145a) Fill in the column of marginal products. What pattern do you see? How might you explain it?b) A worker costs $100 a day, and the firm has fixed costs of $200. Use this information to fill in the column for total cost.c) Fill in the column for average total cost. What pattern do you see?d) Now fill in the column for marginal cost. What pattern do you see?e) Compare the column for marginal product and the column for marginal cost. Explain the relationship.f) Compare the column for average total cost and the column for marginal cost. Explain the relationship.Q.2. (a) Define economies of scale and explain why they might arise. Define diseconomies of scale and explain why they might arise. Also draw the long run average total cost…
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Why does the learning curve apply mainly to direct rather than indirect labor?

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