3. The equation Y = 10+ 0.81x 0.0675x represents a hypothetical production function for a smallholder...

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3. The equation Y = 10+ 0.81x 0.0675x² represents a hypothetical production function for a smallholder farmer growing tobacco on a 1.5 ha of farmland in Chipala EPA of Kasungu ADD. In this equation, Y represents quantity of output produced in metric tons, and x represents average labour used per season during production of the crop. (a) Use the above production function to determine the level of input that maximizes the output and the quantity of production of tobacco in the EPA. (b) Determine the yield of tobacco on the farm? [2 (c) Explain briefly, any two reasons why consideration of productivity of resources is important in the production of goods and services. [4 (d) What are the key differences between the following pairs of terms [2 marks] (i) Variable cost and Explicit cost? (ii) Economic profit and Normal profit? [2 marks] (e) Use a graphical illustration to identify and explain the characteristics of a stage of production where the law of diminishing marginal returns operates. [4 marks] 3. The equation Y = 10+ 0.81x 0.0675x² represents a hypothetical production function for a smallholder farmer growing tobacco on a 1.5 ha of farmland in Chipala EPA of Kasungu ADD. In this equation, Y represents quantity of output produced in metric tons, and x represents average labour used per season during production of the crop. (a) Use the above production function to determine the level of input that maximizes the output and the quantity of production of tobacco in the EPA. (b) Determine the yield of tobacco on the farm? [2 (c) Explain briefly, any two reasons why consideration of productivity of resources is important in the production of goods and services. [4 (d) What are the key differences between the following pairs of terms [2 marks] (i) Variable cost and Explicit cost? (ii) Economic profit and Normal profit? [2 marks] (e) Use a graphical illustration to identify and explain the characteristics of a stage of production where the law of diminishing marginal returns operates. [4 marks]

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