To 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.

1. 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?