Question

13. In a company in the short run the production of a product requires one variable input along with a fixed input. The total product of the units of the variable input from 0 to 5 are, respectively, 0, 10, 18, 24, 28, and 30. Each unit of the product can be sold for $3. The marginal product of the second unit of the resource is:
A. 4
B. 6
C. 8
D. 10

14. In a company in the short run the production of a product requires one variable input along with a fixed input. The total product of the units of the variable input from 0 to 5 are, respectively, 0, 10, 18, 24, 28, and 30. Each unit of the product can be sold for $3. The marginal revenue product of the third unit of resource is:
A. $4
B. $8
C. $18
D. $72

15. In a company in the short run the production of a product requires one variable input along with a fixed input. The total product of the units of the variable input from 0 to 5 are, respectively, 0, 10, 18, 24, 28, and 30. Each unit of the product can be sold for $3. The quantity of the resource needed to produce 28 units of the output is:
A. 2
B. 3
C. 4
D. 5

16. In a company in the short run the production of a product requires one variable input along with a fixed input. The total product of the units of the variable input from 0 to 5 are, respectively, 0, 10, 18, 24, 28, and 30. Each unit of the product can be sold for $3. How many units of the resource would the profit-maximizing firm use if the price of the resource was $18.00?
A. 1
B. 2
C. 3
D. 4

Answer 1

13. Ans: c ) 8

Explanation:

Marginal Product = Change in Total Product / Change in Variable inputs

Variable Inputs	Total Product	Marginal Product
0	0	0
1	10	10
2	18	8
3	24	6
4	28	4
5	30	2

14. Ans: c ) $18

Explanation:

Marginal Revenue Product = Change in Total revenue product / Change in Variable inputs

Variable Inputs	Total Product	Total Revenue Product	Marginal Revenue Product
0	0	0	0
1	10	30	30
2	18	54	24
3	24	72	18
4	28	84	12
5	30	90	6

15. Ans: c ) 4

16. Ans: c ) 3

Explanation:

Profit maximization condition is where MC = MR

Variable Inputs	Total Product	Total Revenue Product	Total Cost	Marginal Revenue Product	Marginal Cost
0	0	0	0	0	0
1	10	30	18	30	18
2	18	54	36	24	18
3	24	72	54	18	18
4	28	84	72	12	18
5	30	90	90	6	18