Neco Model Questions Vol1 2024 Economics Question 4

Practice essay / theory question 4 from the 2024 Neco Model Questions Vol1 Economics examination. This question covers Production .

Neco Model Questions Vol1 2024 Economics Essay / Theory
Topic: Production
Question 4 NECO_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • essay

A firm operates in the short run with a fixed amount of capital. The table shows the number of workers employed (labour, L) and the corresponding total product (TP) of output. | Labour (L) | Total Product (TP) | |------------|--------------------| | 0 | 0 | | 1 | 20 | | 2 | 45 | | 3 | 66 | | 4 | 80 | | 5 | 90 | | 6 | 95 | Using this information, answer the following:

Question Parts

( a )
Calculate the marginal product (MP) of labour and the average product (AP) of labour for each additional worker employed.
( b )
Identify the range of labour input over which the law of diminishing marginal returns sets in, and explain how you reached that conclusion.
( c )
Explain qualitatively how the shapes of the MP and AP curves relate to the shape of the TP curve.
( d )
Assume the market price of the product is ₦50 per unit and the wage rate for each worker is ₦200. Using the concept of value of marginal product (VMP = MP × price), determine the profit‑maximising level of labour employment and justify your answer.

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About This Question

This is Neco Model Questions Vol1 2024 Economics Question 4. It is one of the essay questions from the 2024 Neco Model Questions Vol1 Economics examination.

The question covers Production .

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