Tendai is a welder who started his own business making security gates, fences and other related steel
Question:
Tendai is a welder who started his own business making security gates, fences and other related steel product .
Unit of capital employed
Unit of Capital employed | Output quantity (Q) | |||||||||
10 | 340 | 560 | 800 | 1 000 | 1 160 | 1 380 | 1 650 | 1 950 | 1 980 | 2 200 |
9 | 400 | 620 | 840 | 1 030 | 1 210 | 1 440 | 1 770 | 2 000 | 2 050 | 2 100 |
8 | 380 | 540 | 810 | 980 | 1 090 | 1 400 | 1 700 | 1 980 | 2 010 | 2 050 |
7 | 350 | 510 | 730 | 910 | 1 070 | 1 340 | 1 540 | 1 740 | 1 780 | 1 800 |
6 | 200 | 390 | 590 | 880 | 1 050 | 1 200 | 1 430 | 1 560 | 1 600 | 1 650 |
5 | 120 | 280 | 550 | 810 | 1 000 | 1 160 | 1 300 | 1 400 | 1 450 | 1 440 |
4 | 90 | 260 | 510 | 640 | 730 | 930 | 1 050 | 1 250 | 1 380 | 1 350 |
3 | 70 | 220 | 400 | 510 | 600 | 780 | 830 | 980 | 1 020 | 1 010 |
2 | 50 | 180 | 300 | 410 | 480 | 540 | 590 | 630 | 670 | 660 |
1 | 40 | 100 | 160 | 220 | 290 | 370 | 430 | 480 | 510 | 500 |
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
Unit of labour employed |
Short-run changes in production showing factor productivity
4.1 Use the output associated with five (5) units of capital ( shaded row in table) and prepare a table of information that clearly indicates the ranges of labour input that define Stage I, II and III of production ( 20)
4.2 Explain to Tendai what stage of production is most efficient and how many units of labour he should employ to optimise production when investing five (5) unit of capital. Labour units cannot be divided into parts of a unit (4)
4.2 At what point in the table do diminishing returns begin to take effect? Explain (4)