Gce Model Questions Vol1 2023 Economics Question 4

Practice essay / theory question 4 from the 2023 Gce Model Questions Vol1 Economics examination. This question covers Production, Total product, Marginal product, Average product, Law of diminishing returns, Short‑run vs long‑run .

Gce Model Questions Vol1 2023 Economics Essay / Theory
Topics: Production Total product Marginal product Average product Law of diminishing returns Short‑run vs long‑run
Question 4 GCE_MODEL_QUESTIONS_VOL1 • 2023 • ECONOMICS • essay

A small manufacturing firm uses labour as the only variable input in the short run. The table below shows the total product (TP) obtained at different levels of labour employed (L). All other inputs are held constant. | L (workers) | TP (units) | |-------------|------------| | 0 | 0 | | 1 | 20 | | 2 | 50 | | 3 | 90 | | 4 | 140 | | 5 | 190 | | 6 | 230 | Using this information, answer the following questions.

Question Parts

( a )
Calculate the marginal product (MP) of labour for each additional worker and the average product (AP) of labour at each level of employment.
( b )
Identify the point at which diminishing marginal returns set in and explain how the data illustrate the law of diminishing returns.
( c )
Discuss how an increase in the amount of capital (e.g., more machinery) would affect the TP, MP and AP curves in the short run.
( d )
Explain the difference between short‑run and long‑run production functions and why the firm’s analysis above is limited to the short run.

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About This Question

This is Gce Model Questions Vol1 2023 Economics Question 4. It is one of the essay questions from the 2023 Gce Model Questions Vol1 Economics examination.

The question covers Production, Total product, Marginal product, Average product, Law of diminishing returns, Short‑run vs long‑run .

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