Theory question 102
Theory of ProductionSection A: answer one question only from this section.
The table below relates to the application of fertilizer to a fixed area of land and the production of maize. Use the table to answer the questions that follow.
Tonnes of fertilizer applied: 0, 1, 2, 3, 4, 5, 6, 7, 8, 9
Total production in bags: 1,000, 1,100, 1,250, 1,500, ---, ---, ---, 2,350, 2,380, 2,330
Marginal product: ---, 100, 150, 250, 400, 250, 125, ---, ---, ---
(a) What will be the total output of maize when no fertilizer is applied to the land? (b) Calculate the total production after the application of the following quantities of fertilizer (i) 4 tonnes; (ii) 5 tonnes; (iii) 6 tonnes (c) Calculate the marginal production after the application of the following quantities of fertilizer: (i) 7 tonnes; (ii) 8 tonnes; (iii) 9 tonnes (d)(i) After what level of the application of fertilizer does diminishing marginal returns occur? (ii) After what level of fertilizer application will the total output decrease?
Show the model answer
(a) 1,000 bags
(b) Total production = previous total + marginal product
(i) 4 tonnes: 1,500 + 400 = 1,900 bags
(ii) 5 tonnes: 1,900 + 250 = 2,150 bags
(iii) 6 tonnes: 2,150 + 125 = 2,275 bags
(c) Marginal product = change in total production
(i) 7 tonnes: 2,350 − 2,275 = 75 bags
(ii) 8 tonnes: 2,380 − 2,350 = 30 bags
(iii) 9 tonnes: 2,330 − 2,380 = −50 bags
(d)(i) Diminishing marginal returns set in after 4 tonnes (MP falls from 400 to 250)
(ii) Total output decreases after 8 tonnes (MP becomes negative at the 9th tonne)
TP rises by the MP each time; MP is the difference between successive TPs.