1 Draw an x and y axis. Labour input on the x-axis should go from 0 to 1,000 workers. Output on the y-axis should go from 0 to 50,000 kg. a. Mark the point 500 workers and 30,000 kg. Call this point A. b. Sketch a curved production function relating output to labour input, going through A. c. In a different colour, draw a dotted ray from the origin to point A. Write what the slope of this ray shows. d. Now, on the same diagram, draw and label the impact of a one-off improvement in technology on (i) total output and (ii) the average product of labour. e. Label the new point B and write the amount of labour and the amount of output for B on the diagram.

1 Draw an x and y axis. Labour input on the x-axis should go from 0 to 1,000 workers. Output on the y-axis should go from 0 to 50,000 kg. a. Mark the point 500 workers and 30,000 kg. Call this point A. b. Sketch a curved production function relating output to labour input, going through A. c. In a different colour, draw a dotted ray from the origin to point A. Write what the slope of this ray shows. d. Now, on the same diagram, draw and label the impact of a one-off improvement in technology on (i) total output and (ii) the average product of labour. e. Label the new point B and write the amount of labour and the amount of output for B on the diagram.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 17P

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