Gce Model Questions Vol1 2022 Economics Question 4

Practice essay / theory question 4 from the 2022 Gce Model Questions Vol1 Economics examination. This question covers Production theory, Average product, Marginal product, Marginal cost, Returns to scale .

Gce Model Questions Vol1 2022 Economics Essay / Theory
Topics: Production theory Average product Marginal product Marginal cost Returns to scale
Question 4 GCE_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • essay

A furniture manufacturer produces wooden chairs. The table below shows the amount of labour employed (L, in worker‑hours) and the corresponding total product of labour (TP, number of chairs produced) and variable cost (VC, in ₦) for a single day.

Question Parts

( a )
Calculate the average product of labour (AP) and the marginal product of labour (MP) for each level of labour from 1 to 5 worker‑hours. Show your workings in a table.
( b )
Using the data, compute the marginal cost (MC) of producing each additional chair between successive output levels. Present the MC values in a table.
( c )
Identify the range of labour input over which diminishing marginal returns set in. Explain how this change is reflected in the behaviour of marginal cost.
( d )
Discuss, using the TP‑L relationship, whether the firm is experiencing increasing, constant or decreasing returns to scale over the observed range. Justify your answer.

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About This Question

This is Gce Model Questions Vol1 2022 Economics Question 4. It is one of the essay questions from the 2022 Gce Model Questions Vol1 Economics examination.

The question covers Production theory, Average product, Marginal product, Marginal cost, Returns to scale .

View More Gce Model Questions Vol1 2022 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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