Gce Model Questions Vol1 2017 Economics Question 16

Practice objective / multiple choice question 16 from the 2017 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2017 Economics Objective / Multiple Choice Medium Difficulty
Question 16 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • objective

A firm's total product (TP) from labour L (in units) is given by \( TP = 200L - 4L^{2} + 0.2L^{3} \).\n\n(a) Find the quantity of labour at which average product (AP) is maximised.\n(b) What is the marginal product (MP) at that labour input?\n(c) At labour inputs \(L = 5\) and \(L = 15\), state whether the firm is experiencing increasing, diminishing or constant returns to labour, justifying your answer.

Answer Options

Correct Answer A. Labour at max AP = 10; MP at that point = 180; At L = 5 diminishing returns; At L = 15 increasing returns
B. Labour at max AP = 8; MP at that point = 160; At L = 5 increasing returns; At L = 15 diminishing returns
C. Labour at max AP = 10; MP at that point = 150; At L = 5 increasing returns; At L = 15 constant returns
D. Labour at max AP = 12; MP at that point = 200; At L = 5 constant returns; At L = 15 diminishing returns
Correct Answer
A
Correct Option:
Labour at max AP = 10; MP at that point = 180; At L = 5 diminishing returns; At L = 15 increasing returns

About This Question

This is Gce Model Questions Vol1 2017 Economics Question 16. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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