Below are hypothetical data for a manufacturer produces a commodity that requires only one variable input. Total product is given. Compute and graph the average and marginal product curves. Make your basic calculations and set them up in tabular form, using the following information for the stub and column (1) entries and your calculations for average product in column (2) and marginal product in column (3). Save them, as they form the basis for a subsequent problem in Chapter 7. After completing the table and graph, answer the following questions:
1. When marginal product is increasing, what is happening to average product?
2. Does average product begin to fall as soon as marginal product does? That is, which occurs first, the point of diminishing marginal or average returns?
3. When average product is at its maximum, is marginal product less than, equal to, or greater than average product?
4. Does total product increase at a decreasing rate: (a) when average product is rising? (b) when marginal product is rising? (c) when average product begins to fall? (d) when marginal product passes its maximum value?
5. When average product equals zero, what is total product?
6. What is the precise relation between a two-factor production function and the marginal product curve for one factor?
7. Beginning with a production function or schedule involving two inputs, explain how one derives the total, average, and marginal products for a single factor.
