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Analyzing Production and Costs Suppose a company is producing its output with variable and fixed inputs in the short run. Its only variable resource is labor and each laborer is paid $300 per day. The cost for its fixed inputs is $500. Using the notes you took while reading the module and viewing its videos, complete the chart below. Then answer the questions that follow. Labor Total Average Marginal Total Total Total Cost Average Average Average Marginal Output Physical Physical Variable Fixed Cost Variable Fixed Cost Total Cost Cost Product Product Cost Cost Q APP MPP TVC TFC TC AVC AFC ATC MC 0 15 UI A W NHO F 35 50 60 65 After completing the chart, answer the questions below: 1. Why does marginal output eventually begin to decline in the production function above? 2. How does marginal physical product impact total product and average product? 3. What observation can you make in regard to how total cost and total variable cost are related? What is the difference between these two costs? What does that dollar amount represent? 4. The module showed that the AVC curve should take on a u-shape. Do your figures above reflect this? How is the change in productivity responsible for this? 5. The module showed that the AFC curve should decrease as production expands. Do your figures above reflect this? Why is this true? 6. Marginal cost should during the period of increasing marginal returns and during the period of diminishing marginal returns