ECO 365 WEEK 2 Production Worksheet
ECO 365 WEEK 2 Production Worksheet
ECO 365 WEEK 2 Production Worksheet
Complete the Production Worksheet.
Click the Assignment Files tab to submit your assignment.Allison owns a sandwich shop. Her fixed inputs include the building and equipment, and her variable inputs are the ingredients and workers. Allison wants to determine the best number of employees to hire, so she is focusing on the relationship between the number of workers employed and the number of sandwiches sold in a day. When combined with information about input prices, she will be able to determine how her costs vary with the number of workers employed. Adding information about product price to calculate revenues, she can then determine the most profitable number of employees to hire.
Allison has found that output, measured as the number of sandwiches produced and sold per day, varies with the number of workers employed as shown in the table below. Complete the table by calculating the average product (AP) for each level of labor and the marginal product (MP) of each additional worker.
Labor Output Average Product Marginal Product
0 0
__________
1 90 __________
__________
2 190 __________
__________
3 300 __________
__________
4 400 __________
__________
5 480 __________
Is this production function consistent with the law of diminishing marginal returns? Explain.
ECO 365 WEEK 2 Production Worksheet
