1) Explain the relationship between total, marginal, and average product.
2) Distinguish between fixed, variable and total costs.
3) Explain the difference between average and marginal costs.
4) Solve the following:
Labor Total Physical Product
0 0
1 60
2 130
3 190
4 230
5 250
Calculate her Average Physical Product (APP) at Labor 2?
5) Marginal Physical Product (MPP = TP/Labor) at Labor 4?
6) Average Variable Costs (AVC = TW*L/APP) at Labor 3? Wages are fixed at $1,000 per month.
7) Marginal Costs (MC = TW*L/MPP) at Labor 5? Wages are fixed at $1,000 per month.
