Seminar 5

By Le Thanh Ha
Type I: True/False question (give a brief explanation)
1. Diminishing marginal productivity implies decreasing total product.
False. Marginal productivity negative implies decreasing total product
Or Diminishing marginal productivity implies slowly increasing/decreasing total product
2. Diminishing marginal product exists when the production function becomes flatter
as inputs increase.
True.

3. If the marginal cost of producing the tenth unit of output is $3, and if the average
total cost of producing the tenth unit of output is $2, then at ten units of output,
average total cost is rising.
True. When MC > ATC => ATC is rising.

4. If the marginal cost of producing the fifth unit of output is higher than the marginal
cost of producing the fourth unit of output, then at five units of output, average total
cost must be rising.
False. MC is rising => ATC can be rising or falling
(Vẽ hình tương tự câu 3)
5. The shape of the marginal cost curve tells a producer something about the marginal
product of her workers.
Type II: Discussion questions
Question 1.:A Frim has Total Cost: TC = 50Q+30000 and the demand function is P = 100-
0.01Q
1. What is the marginal cost of firm? Fixed cost?
2. What is the marginal revenue of firm?
3. What is the quantity which the firm will produce to maximize its profit?
Question 2: Nobita has a company producing socks. Assume that the market price of sock
is 10$. The total costs are 𝑇𝐶(𝑄) = 845 + 5𝑄 + 𝑄 2 /80. What are the quantity that firm
maximizes its profits? What are profits?

Type III: Multiple Choice

Table 5-1 Student service
Number Output
of (number of pet MPL
Workers visits)
0 0 0
1 20 20
2 45 25
3 60 15
4 70 10
1. Refer to Table 5-1. What is the marginal product of the second worker?
a. 15
b. 20
c. 22.5
d. 25
2. Refer to Table 5-1. What is the marginal product of the third worker?
a. 15
b. 20
c. 35
d. 60
3. Refer to Table 5-1. Student’s service experiences diminishing marginal
productivity with the addition of the
a. first worker.
b. second worker.
c. third worker.
d. fourth worker.

4. Refer to Table 5-1. Suppose that Student’s service has a fixed cost of $50 per month
for her cell phone. Each worker costs Student $60 per day. What is the shape of
Student’s total cost curve as output increases from 0 and 45?
a. Total cost increases but gets flatter
b. Total cost increases and gets steeper.
c. Total cost decreases and gets flatter.
d. Total cost decreases but gets steeper.
5. Refer to Table 5-1. Suppose that Student’s service has a fixed cost of $50 per month
for her cell phone. Each worker costs Student $60 per day. What is the shape of
Student’s total cost curve as output increases from 45 to 70?
 a. Total cost increases but gets flatter.
b. Total cost increases and gets steeper.
c. Total cost decreases and gets flatter.
d. Total cost decreases but gets steeper.
6. Let L represent the number of workers hired by a firm and let Q represent that firm's
quantity of output. Assume two points on the firm's production function are (L = 12, Q
= 122) and (L = 13, Q = 132). Then the marginal product of the 13th worker is
a. 8 units of output.
b. 10 units of output. (=132 – 122)
c. 122 units of output.
d. 132 units of output.
7. For a large firm that produces and sells automobiles, which of the following costs would
be a variable cost?
a. the unemployment insurance premium that the firm pays to the state of Missouri
that is calculated based on the number of worker-hours that the firm uses
b. the cost of the steel that is used in producing automobiles
c. the cost of the electricity of running the machines on the factory floor
d. All of the above are correct.
8. Suppose that for a particular firm the only variable input into the production process is
labor and that output equals zero when no workers are hired. In addition, suppose that
when four units of output are produced, the total cost is $175, and the average variable
cost is $33.75. What would the average fixed cost be if ten units were produced?
a. $4
b. $10
c. $40
d. $135
Table 5.2
Quantity Fixed Variable
of Output Cost Cost
0 $20 $0
1 $20 $10
2 $20 $40
3 $20 $80
4 $20 $130
5 $20 $200
6 $20 $300

9. Refer to Table 5-2. What is the average fixed cost of producing 5 units of output?
a. $4
b. $5
c. $40
d. $44
10. Refer to Table 5-2. What is the marginal cost of producing the fifth unit of output?
a. $4
b. $40
c. $50
d. $70