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Q3. A basic concept in economics is the production function. It is a systematic way of showing the relationship between
Posted: Thu May 19, 2022 7:59 am
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- Q3 A Basic Concept In Economics Is The Production Function It Is A Systematic Way Of Showing The Relationship Between 1 (113.77 KiB) Viewed 51 times
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Q3. A basic concept in economics is the production function. It is a systematic way of showing the relationship between different amounts of inputs which can be used to produce a certain quantity of a particular product. (a) Explain the law of diminishing marginal returns in a production process. (3 Marks) (b) Given the 2020 onion production data of a small scale farmer in Kabwe District in table 1 on page 3, calculate the average physical product (APP), the marginal physical product (MPP), the marginal value product (MVP) and the marginal input cost (MIC) at each level of the variable input (showing the general formula for each just once) if the unit price of variable input is K12 and the unit price of output is K2. (8 Marks)
Table.1. Production function in tabular form (For
question 3) Fertilizer (kg/0.25 Lima) Output (kg/0.25 Lima) 0 0 1 2 3 4 5 6 7 8 9 10 12 30 44 54 62 68 72 74 72 68
(c) Determine the profit maximization level of the farmer mentioned in (b) above.