Theory question 101
Theory of ProductionSection A: answer one question only from this section.
Table of Input and Output
Variable units of labour: 1, 2, 3, 4, 5, 6, 7, 8
Fixed factors (hectares of land): 3, 3, 3, 3, 3, 3, 3, 3
Total product (kg): 8, 18, 36, 48, 55, 60, 60, 56
Average product (kg): 8, 9, P, 12, 11, Q, 8.6, 7
Marginal product (kg): –, 10, 18, R, 7, 5, S, T
Use the table above to answer the following questions: (a) Complete the table by calculating the missing figures P, Q, R, S, T. (b) Draw the Total Product (TP) curve and Marginal Product (MP) curve in one diagram. (No graph sheet is required) (c) Explain the relationship between TP and MP.
Show the model answer
(a) AP = TP ÷ labour; MP = change in TP
P = 36 ÷ 3 = 12 kg
Q = 60 ÷ 6 = 10 kg
R = 48 − 36 = 12 kg
S = 60 − 60 = 0 kg
T = 56 − 60 = −4 kg
(b) Labour on the horizontal axis, product on the vertical axis; TP rises steeply, flattens to a peak of 60 at 6–7 units, then falls; MP rises to 18 at 3 units, then falls, cuts the axis (zero) at 7 units and becomes negative
(c) While MP rises, TP rises at an increasing rate
When MP falls but is positive, TP still rises but at a decreasing rate
When MP is zero, TP is at its maximum
When MP is negative, TP falls
MP is the slope of TP: positive MP means TP is rising, zero MP means TP is at its peak.