Question

Econ 2200W                         Homework #2 (Ch 11)                                Name:_______________

Fill in the blanks in the accompanying table shown at the bottom of page and answer the following questions:(Round to two digits after decimal point in computation)

1. What happens to total product when marginal product is negative?

2. What happens to average product when marginal product is greater than average product?

3. What happens to average product when marginal product is less than average product?

4. At what level of variable input does marginal product begin to decrease?

5. At what level of output does marginal cost begin to increase?

6. Summarize the relationship between marginal product and marginal cost.

7. What happens to marginal costs when total product begins to fall?

8. What is happening to average variable costs when they equal marginal costs?

9. Marginal costs equal average variable costs between what output levels?

10. What is happening to average total costs when they equal marginal costs?

11 .Marginal costs equal average total costs between what output levels?

*If you could explain to me how you calculate the answers for the table, I would greatly appreciate it!

	Units of		Total Product		Marginal		Average		Price of		Variable		Average		Fixed		Total		Average Total		Marginal
	Variable		(Output)		Product		Product		Input		Cost		Variable		Cost		Cost		Cost		Cost
	Input												Cost
	0	0		---		---		$100				---		$200				---		---
	1	6						$100						$200
	2	15						$100						$200
	3	27						$100						$200
	4	37						$100						$200
	5	45						$100						$200
	6	50						$100						$200
	7	52						$100						$200
	8	50						$100						$200

Answer 1

MP = Change in TP/Change in variable input

AP = TP/Unit of variable input

1) Total product decreases.

2) Average product increases.

3) Average product decreases.

4) 3rd unit

5) From 6th unit