1) Find the average product for all with this marginal productivity table :

# of cooks Marginal Product

1 4

2 5

3 6

4 7

5 6.8

6 6.7

2) If a banana firm is maximizing its profit and is earning positive economic profit, which of the following must be true?

a) ATC

b) ATC > price; MC = MR

c)ATC MR

d)TC >TC ; MC > MR

e)TC = TR ; MC > MR

f) None of the above.

3) Where does the first decline in productivity occurs upon this example:

#of workers Average Productivity

1 6

2 8

3 9

4 9.25

5 9.30

6 9.32

4) What is happening to the variable costs in this image? What is happening to the total costs in this image? [increasing? decreasing? staying constant?]

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