MICROECONOMICS

Question 1
APP = Output / Units of Labour
MPP = TP(n) – TP(n-1)
    L (A)
    Q (B)
    APP (A/B)
    MPP
    0
    0
    0
    0
    1
    10
    10
    10
    2
    24
    12
    14
    3
    42
    14
    18
    4
    58
    14.5
    16
    5
    70
    14
    12
    6
    80
     13.33
    10
    7
    88
     12.57
    8
Question 2
Plotting of APP and MPP in a graph
Question 3
As per the APP diagram, at labour level of 3, the law of diminishing marginal return starts to appear as the MPP starts to decrease.
Question 4
MPP crosses APP at (c) 4-5
Question 5
In the beginning, the APP increases till the 3rd unit of labour and then decreases as in case of a short term, the capital is fixed and only labour can change. Till 3rd unit of labour, the labour is utilised effectively beyond which the labour keeps on increasing on fixed capital which decrease the efficiency/productivity of labour and therefore the APP starts falling.
Question 6
    Q
    TFC
    TVC
    TC
    ATC
    MC
    0
    50
    0
    50
    
     
    1
    50
    20
    70
    70
    20
    2
    50
    39
    89
    44.5
    19
    3
    50
    61
    111
    37
    22
    4
    50
    80
    130
    32.5
    19
    5
    50
    125
    175
    35
    45
    6
    50
    211
    261
    43.5
    86
    7
    50
    361
    411
     58.71
    150
Question 7
Question...