Neco Model Questions Vol1 2025 Economics Question 4

Practice essay / theory question 4 from the 2025 Neco Model Questions Vol1 Economics examination. This question covers Production .

Neco Model Questions Vol1 2025 Economics Essay / Theory
Topic: Production
Question 4 NECO_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • essay

A small manufacturing firm employs labour as its variable input. The table below shows the monthly output (units) produced with different numbers of workers employed. | Workers (L) | Output (Q) | |-------------|------------| | 1 | 10 | | 2 | 25 | | 3 | 45 | | 4 | 60 | | 5 | 70 | | 6 | 75 | Assume that the wage rate per worker is N5,000 per month and the price of the product is constant at N2,000 per unit.

Question Parts

( a )
Calculate the marginal product of labour (MPL) for each additional worker hired from the second to the sixth worker.
( b )
Compute the average product of labour (APL) for each level of employment shown in the table.
( c )
Identify the range of labour employment where the firm experiences increasing returns to labour, constant returns, and decreasing returns. Use the relationship between MPL and APL to justify your answer.
( d )
Assuming the firm wishes to maximise profit, explain how it should decide the optimal number of workers to employ. Incorporate the concepts of marginal revenue product of labour (MRPL) and the wage rate in your discussion.

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About This Question

This is Neco Model Questions Vol1 2025 Economics Question 4. It is one of the essay questions from the 2025 Neco Model Questions Vol1 Economics examination.

The question covers Production .

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