240 810 — —
a. Compute the average product of labour for each level of
output and fill in the table. Plot the AP curve on a scale
diagram.
b. Compute the marginal product of labour for each interval
(that is, between 100 and 120 hours, between 120 and
140 hours, and so on). Fill in the table and plot the MP
curve on the same diagram. Remember to plot the value
for MP at the midpoint of the output intervals.
c. Is the “law of diminishing marginal returns” satisfied?
d. Explain the relationship between the marginal product of
labour and the average product of labour.
15. This question requires you to understand the relationship
between total product, average product, and marginal product.
Each of the diagrams below shows how total product (TP)
changes as the quantity of the variable input (which we call L
changes. These reflect four different production functions.
a. In each case, describe in words how total output depends
on the amount of variable input.
b. For each production function, draw a diagram showing
the average product (AP) curve. (Recall that AP is given
by total output divided by total variable input. The value
of AP is also equal to the slope of a straight line from the
origin to the TP curve.)