1. Draw a typical short run production function with its characteristic shape. Be sure to label the two axes, and equation.

A. How are changes in output achieved in the short run when capital is fixed? Refer to your graph.

B. How is the law of diminishing returns related to your graph? A statement of the law and referring to the graph will help you. You can put numbers on the graph, on both axes, in order to help explain when diminishing returns begins to set in.

C. How is the marginal product of labor related to the SR production function. We were able to depict a typical marginal

product of labor curve from information derived from the Total Product Curve (the SR production function).

Why would the MP of labor curve look the way we depicted?

D. Finally, we related the MP of labor curve to the MC curve. Along the MC curve the wage was held constant. Describe in no more than 3 sentences, what is the relationship between the two curves. In other words, how the MC curve is shaped is driven by what is going on along the MP of labor curve as L increases.