INSTITUTE OF BUSINESS MANAGEMENT

COLLEGE OF BUSINESS MANAGEMENT

ECO 104 Micro and Macro Economics

Assignment # 6

1. What is marginal product, and what does it mean if it is diminishing?

2. A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish
caught:

Hours Labor (L) Quantity of Fish (Q)

0 0
1 10
2 18
3 24
4 28
5 30

a. What is the marginal product of each hour spent fishing?

b. What is the Average product per hour spent fishing?
c. Use these data to graph the fisherman’s production function. Explain its shape.
d. Draw the marginal and average product curves in a separate diagram and explain their shapes.

Q. 3. Complete the following table by calculating Total Fixed Cost, Total Cost, Marginal Cost, Average Fixed Cost,
Average Variable Cost and Average Total Cost.

Q (TP) FC VC TC AFC AVC ATC MC

0 0 70
1 45
2 85
3 120
4 150
5 185
6 225
7 270
8 325
9 390
10 465

Note: The Assignment should be hand written on the foolscap sheets and a scanned copy in PDF should be uploaded on
LMS.