Production Problem Cakes by Monica a bakery under the umbrella of the Cafe Brule restaurant) in Vermillion, SD makes cupcakes for customers to purchase both in the store and in bulk orders for birthday parties and weddings Suppose in the short-run, a bakery like Cakes by Monica has a fixed amount of capital but can hire college students from a local college easily to increase production as needed. A production schedule is provided for you where is Antons Afrievales a) Using the schedule provided. calculate the marginal and average products of labor when K = 3. K=3 L Output (0) MPK = 3 APK=3 3 0 0 3 1 10 3 2 25 3 3 45 3 4 60 3 5 70 3 6 75 3 7 75 3 8 70 3 19 60 b) Using your calculations, for which workers are there increasing decreasing and negative marginal retums to labor? High Increasing Decreasing Negative c) Suppose this bakery decides to add another unit of capital in the long-run. Using the schedule provided. find the marginal product of the 4th unit of capital and the marginal and average products of labor when K K=4 L Output(Q) MP K=4 MP AP, K = 4 14 0 0 4 1 15 14 2 35 4 3 60 14 4 80 14 5 95 14 6 105 4 7 110 4 8 110 19 105 Create a graph of the marginal and average products of labor for K and K=4 Low e) Using your graph and the data, does the addition of another unit of capital increase, decrease, or not change the productivity of labor? The addition of another unit of capital the productivity of labor