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4. The table below shows the number of cars produced by a car manufacturer. Car production...

4. The table below shows the number of cars produced by a car manufacturer. Car production depends on the number of workers as follows:

Assume that all other inputs other than labor are fixed. a. Complete the table by calculating MPL and APL.

  1. Over what range of labor are there increasing returns to scale? diminishing returns to scale? Negative returns to scale?
  2. Over what range of labor is MPL greater than APL? What is happening to APL as employment increases over this range?
  3. Over what range of labor is MPL smaller than APL? What is happening to APL as employment increases over this range?

Number of Workers

Number of

Cars

Produced

MPL

APL

0

0

–

–

1

6

2

18

3

33

4

51

5

66

6

75

7

78

8

77

9

69

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