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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught:

Hours

Quantity of Fish

(in pounds)

0 hours 0 lb.
1 10
2 18
3 24
4 28
5 30

a. What is the marginal product of each hour spent fishing?

b. Use these data to graph the fisherman's production function. Explain its shape.

c. The fisherman has a fixed cost of $10 (his pole). The opportunity cost of his time is $5 per hour. Graph the fisherman's total-cost curve. Explain its shape.

Subpart (a):

To determine
Calculation of marginal product and total cost.

Explanation

Table -1 show the data of hours spending for fishing and the quantity of fish caught.

Table -1

Hours Quantity of fish
0 0
1 10
2 18
3 24
4 28
5 30

Marginal product can be calculated by using the following formula:

Marginal product=(Total outputPresentTotal outputPreviousHoursPresentHoursPrevious) (1)

Substitute the respective values in equation (1) to calculate the marginal product for 1 hour.

Marginal product=(10010)=10

Thus, the value of marginal product for 1 hour is $10

Subpart (b):

To determine
Production function.

Subpart (c):

To determine
An opportunity cost of running the hardware store.

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