The following table represents a certain production function of what a certain facility can produce in one day. Assume the firm has a fixed amount of physical capital that they rent for $500 a day. We will use this example to review CH. 7.  [probably easiest to copy and paste the table and question parts into the submission box and then add your response. Make your text a different color for ease of viewing]

L	Q	MPL	FC	VC	TC	AFC	AVC	ATC	MC
0	0		$500	$0	$500
1	20			$100
2	50
3	100
4	120
5	130
6	135

1) Complete the table by filling in all the missing values. You can assume that each worker earns $100 per day

2) Do you see gains from specialization in the production function. In what range do you see these gains? (specify the workers)

3) For which worker does the marginal product start to decrease? Briefly explain why there is a diminishing marginal product of labor.

4) Why does marginal cost rise so quickly at the end? Explain by connecting to marginal product of labor.

5) At what quantity does average total cost start to rise? What causes it to rise?

Answer rating: 100% (QA)

To complete the table lets fill in the missing values L Q MPL FC VC TC AFC AVC ATC MC 0 0 500 0 500 1 20 20 500 100 600 25 5 30 100 2 50 30 500 200 70... View the full answer