Neco 2019 Economics Question 4

Practice essay / theory question 4 from the 2019 Neco Economics examination. This question covers Production function, Marginal product of labour, Law of diminishing marginal returns, Short‑run cost curves .

Neco 2019 Economics Essay / Theory

Topics: Production function Marginal product of labour Law of diminishing marginal returns Short‑run cost curves

Question 4 NECO • 2019 • ECONOMICS • essay

A firm produces a single product using labour (L) and capital (K). Capital is fixed at 10 units. The table shows the total output (Q) obtained as the number of workers employed varies. | Labour (L) | Total Output (Q) | |------------|------------------| | 1 | 15 | | 2 | 35 | | 3 | 60 | | 4 | 90 | | 5 | 120 | Answer the following questions.

Question Parts

( a )

Calculate the marginal product of labour (MPL) for each additional worker hired (from the 1st to the 5th worker). Present your answers in a table.

( b )

Identify the range of labour input over which the law of diminishing marginal returns sets in. Explain the economic reasoning behind this observation.

( c )

Assuming the firm operates in the short run with capital fixed, discuss how the shapes of the total product curve and the marginal product curve influence the shape of the firm's short‑run average cost (AC) and marginal cost (MC) curves.

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About This Question

This is Neco 2019 Economics Question 4. It is one of the essay questions from the 2019 Neco Economics examination.

The question covers Production function, Marginal product of labour, Law of diminishing marginal returns, Short‑run cost curves .

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