o answer questions 1 and 2, consider the following scenario: when a business adds headcount to the production line, productivity naturally improves. This means that the output is increased for this specific worker than previous workers.

1. Explain what will happen to the margin with regards to the additional cost of the output.

2. Explain what happens with the marginal product rising. Does the cost

of producing another unit of output decline when the marginal

product is falling? Is the same true when average variable is rising?

What about total product rising?

3. You are given the following economic data:

The price of pizza is S4, the quantity demanded of pizza is 60 slices, the quantity demanded of cheese bread is 100 pieces.

When the price of pizza is $2. the quantity demanded of pizza is 80

slices, and the quantity demanded of cheese bread a 70 pieces Calculate the price of elasticity of demand. Is the result clastic or melastic? Explain