Consider the values in the following table for the Winsome Widget Factory. A. Fi

Question

Consider the values in the following table for the Winsome Widget Factory. A. Fill in the formula for MP and AP at the top of the column in the gray section within the table. B. Fill in the missing values for MP and AP in the blue sections of the table. Winsome Widget Factory Quantity of Labor Total Output Marginal Product of Labor Average Product of Labor 0 0 1 600 2 1,100 3 1,500 4 1,950 5 2,250 6 2,300 7 2,275 C. Identify the point of diminishing returns. Why do diminishing returns occur? D. Identify the production levels where increasing and negative returns occur, if any.

Explanation / Answer

Quantity of Labor Total Output Marginal Product of Labor Average Product of Labor 0 0 - 0 1 600 600 600 2 1,100 500 550 3 1,500 400 500 4 1,950 450 487.5 5 2,250 300 450 6 2,300 50 383.33 7 2,275 -25 325

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