1.Use the following table to answer the questions below.

Number of ChefsNumber of Pizzas produced per day

15

225

340

450

555

658

758

a.Find the marginal product (MP) for each value of L.

b.The firm is experiencing increasing returns with how many workers?

c.At what number of workers will diminishing marginal returns begin?

d.Find the marginal revenue product (MRP) for each value of L, assuming the price of a pizza is $10.

e. If the price of a pizza is $10 and each chef's wage is $50 per day, how many chefs will this competitive pizza shop hire in order to maximize profits?

f.At the optimal quantity of labor, the (economic) profit equals $________.

g. Draw a graph showing the optimal quantity of the labor input.Be sure to indicate where the P of labor = MRP of labor.

2.a.Fill in the blanks in the table below.What is the value of TFC?

QTCTVCACAVCAFCMC

1$100___________________________________

2______________$70_____________________

3_______$127_____________________$37

4$216___________________________________

5___________________________________$49

6_____________________$46______________

7$399___________________________________

8______________$62_____________________

b.Draw two graphs using the numbers derived above - one graph showing TFC, TVC, and TC and the other showing AFC, AVC, AC, and MC.[Please be neat and draw the graphs big enough so that they can be read easily.]

Use the table below to answer question 3

3. Assume that a firm finds its profits will be maximized when it produces 50 units of product W (i.e., "widgets").Three techniques shown in the table below will produce exactly 50 widgets.

ResourceTechniqueTechniqueTechnique

PricesABC

Labor$5542

Capital10235

Entrepreneur20111

a.Which technique is the least expensive way of producing a widget?

b.Suppose the firm chooses the least-cost method of production.If widgets sell for $2 each, what is

the total economic profit of the firm?

c.What is the total accounting (i.e., normal) profit of the firm?