Micro Topic 3.

1
The Production Function
Part 1: Graphing Practice-​ ​The following chart shows production data for Tony’s Hat Store. Fill in the
columns and graph the total product (TP), marginal product (MP), and average product (AP).

Quantity of Total Product Marginal Product Average Product

Inputs (Total hats (additional hats (hats per worker)
(Workers hired) produced) from each worker)
0 0 - -
1 10
2 25
3 45
4 60
5 70
6 75
7 75
8 70

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 Micro Topic 3.1
The Production Function
Part 2- Check Your Understanding-​ ​Use the data in the table and graph to answer the questions.
1. How many total hats can three workers make?

2. How many additional hats are made as a result of hiring the 5​th​ worker?

3. On average, how many hats can 2 workers make?

4. After which worker does the marginal product diminish?

5. Does total product decrease when marginal product falls?

6. What happens to the total product when the marginal product is zero?

7. The hiring of which worker leads to 20 additional hats being produced?

8. How many workers does it take to make 60 hats?

9. Identify something significant about hiring the 8​th​ worker?

10. Which workers experience increasing marginal returns?

11. What happens to the average product (AP) when the marginal product is below the average product?
Explain.

12. Identify the three stages of returns.

13. Define the law of diminishing marginal returns.

14. Explain the relationship between the marginal product curve and the average product curve.

Part 3- Stretch Your Thinking-​ ​Answer the following question.

15. The table does not give enough information to decide how many workers Tony’s Hat Store should hire
to maximize profit. What additional information would you need to determine exactly how many workers
should be hired?

Video Help: ​https://youtu.be/xLSRMt-wWAM ​©Copyright Jacob Clifford 2020. ​www.ACDCecon.com

Annual license required. Do not use unless you have purchased a license