1) Find the average product of 3 cooks with this marginal productivity table :

# of cooks Marginal Product

1 4

2 5

3 6

4 7

5 6.8

6 6.7

a) 1

b) 5

c) 7

d) 6

e) 15

f) 18

2) If a banana firm is maximizing its profit and is earning positive economic profit, which of the following must be true?

a) ATC

b) ATC > price; MC = MR

c)ATC MR

d)TC >TC ; MC > MR

e)TC = TR ; MC > MR

f) None of the above.

3) Where does the first decline in productivity occurs upon this example:

#of workers Average Productivity

1 6

2 8

3 9

4 9.25

5 9.30

6 9.32

a) 6th

b) 5th

c) 4th

d) 3th

e) The productivity increases through the whole range

4) What is happening to the variable costs in this image? What is happening to the total costs in this image? [increasing? decreasing? staying constant?] --- Meaning, variable cost is increasing or decreasing? Total cost is increasing or decreasing?

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