Neco Model Questions Vol1 2018 Economics Question 4

Practice essay / theory question 4 from the 2018 Neco Model Questions Vol1 Economics examination. This question covers Production, Short‑run Production .

Neco Model Questions Vol1 2018 Economics Essay / Theory
Topics: Production Short‑run Production
Question 4 NECO_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • essay

A small‑scale bakery produces loaves of bread using labour (L) and capital (K). Capital is fixed at two ovens. The table shows the total product (TP) of labour measured in loaves per day. | Labour (L) – number of workers | Total Product (TP) – loaves per day | |-------------------------------|---------------------------------------| | 0 | 0 | | 1 | 40 | | 2 | 85 | | 3 | 120 | | 4 | 140 | | 5 | 150 | | 6 | 155 | Answer the following questions:

Question Parts

( a )
Calculate the marginal product of labour (MPL) for each additional worker from L = 1 to L = 6.
( b )
Identify the range of labour input where the law of diminishing marginal returns sets in, and explain why this occurs.
( c )
Calculate the average product of labour (APL) when 4 workers are employed and compare it with the MPL at that point. State what this indicates about the efficiency of labour utilisation.
( d )
If the bakery wishes to maximise total product in the short run, what is the optimal number of workers? Justify your answer with reference to MPL and APL.

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About This Question

This is Neco Model Questions Vol1 2018 Economics Question 4. It is one of the essay questions from the 2018 Neco Model Questions Vol1 Economics examination.

The question covers Production, Short‑run Production .

View More Neco Model Questions Vol1 2018 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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