Neco 2017 Economics Question 4

Practice essay / theory question 4 from the 2017 Neco Economics examination. This question covers Production, Marginal Product, Average Product, Profit Maximisation .

Neco 2017 Economics Essay / Theory
Topics: Production Marginal Product Average Product Profit Maximisation
Question 4 NECO • 2017 • ECONOMICS • essay

A small‑scale furniture manufacturer produces wooden chairs. The short‑run total product (TP) for different levels of labour input (L) is shown in the table below. | L (workers) | TP (chairs) | |-------------|-------------| | 0 | 0 | | 1 | 15 | | 2 | 45 | | 3 | 78 | | 4 | 110 | | 5 | 135 | | 6 | 150 | | 7 | 158 | All other inputs are fixed in the short run.

Question Parts

( a )
Calculate the marginal product of labour (MP) for each additional worker from L = 1 to L = 7. Show your calculations.
( b )
Identify the range of labour input where diminishing marginal returns set in. Explain using the MP values obtained.
( c )
Using the data, calculate the average product of labour (AP) for L = 4 and L = 6. Which level of labour yields the higher AP? Explain briefly.
( d )
If the market price of a chair is \(\text{₦}5,000\) and the weekly wage rate per worker is \(\text{₦}30,000\), determine the profit‑maximising level of labour assuming other costs are fixed. Use marginal analysis (compare the value of marginal product to the wage). Show your reasoning.

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About This Question

This is Neco 2017 Economics Question 4. It is one of the essay questions from the 2017 Neco Economics examination.

The question covers Production, Marginal Product, Average Product, Profit Maximisation .

View More Neco 2017 Economics Questions More Neco Practice Questions Back to Questions

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