Questions: The following table represents data for Randle's Candles. Labor Units (Employees) Total Product (Candles per Hour) Marginal Product of Labor Average Product of Labor ------------ 0 0 - - 1 18 18 18.0 2 42 24 21.0 3 78 36 26.0 4 112 34 28.0 5 140 28 28.0 6 161 21 26.8 7 173 12 24.7 8 173 0 21.6 9 165 -8 18.3 10 150 -15 15.0 1.) Using the multipoint curve drawing tool, draw a graph showing the total product (TP), marginal product of labor (MP), and average product of labor (AP). 2.) Using the point drawing tool, identify where increasing returns, diminishing returns, and negative returns set in on the total product curve. Plot 3 separate points.

The following table represents data for Randle's Candles. Labor Units (Employees) Total Product (Candles per Hour) Marginal Product of Labor Average Product of Labor ------------ 0 0 - - 1 18 18 18.0 2 42 24 21.0 3 78 36 26.0 4 112 34 28.0 5 140 28 28.0 6 161 21 26.8 7 173 12 24.7 8 173 0 21.6 9 165 -8 18.3 10 150 -15 15.0 1.) Using the multipoint curve drawing tool, draw a graph showing the total product (TP), marginal product of labor (MP), and average product of labor (AP). 2.) Using the point drawing tool, identify where increasing returns, diminishing returns, and negative returns set in on the total product curve. Plot 3 separate points.
Transcript text: The following table represents data for Randle's Candles. \begin{tabular}{cccc} \begin{tabular}{c} Labor \\ Units (Employees) \end{tabular} & \begin{tabular}{c} Total \\ Product (Candles \\ per Hour) \end{tabular} & \begin{tabular}{c} Marginal \\ Product of \\ Labor \end{tabular} & \begin{tabular}{c} Average \\ Product of \\ Labor \end{tabular} \\ 0 & 0 & - & - \\ 1 & 18 & 18 & 18.0 \\ 2 & 42 & 24 & 21.0 \\ 3 & 78 & 36 & 26.0 \\ 4 & 112 & 34 & 28.0 \\ 5 & 140 & 28 & 28.0 \\ 6 & 161 & 21 & 26.8 \\ 7 & 173 & 12 & 24.7 \\ 8 & 173 & 0 & 21.6 \\ 9 & 165 & -8 & 18.3 \\ 10 & 150 & -15 & 15.0 \end{tabular} 1.) Using the multipoint curve drawing tool, draw a graph showing the total product (TP), marginal product of labor (MP), and average product of labor (AP). 2.) Using the point drawing tool, identify where increasing returns, diminishing returns, and negative returns set in on the total product curve. Plot 3 separate points.
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Solution

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Solution Steps

Step 1: Plot the Total Product (TP) Curve

Plot the points from the table where labor units are on the x-axis and total product (candles per hour) is on the y-axis. Connect the points with a smooth curve. The points are (0,0), (1,18), (2,42), (3,78), (4,112), (5,140), (6,161), (7,173), (8,173), (9,165), (10,150).

Step 2: Plot the Marginal Product (MP) and Average Product (AP) Curves

On the same graph, plot the MP and AP values. Use a different color or line style to distinguish them from the TP curve. The MP points are (1, 18), (2,24), (3, 36), (4,34), (5,28), (6,21), (7,12), (8,0), (9, -8), (10,-15). The AP points are (1,18), (2,21), (3,26), (4,28), (5,28), (6,26.8), (7, 24.7), (8,21.6), (9, 18.3), (10, 15).

Step 3: Identify Increasing, Diminishing, and Negative Returns
  • Increasing Returns: Find the point on the TP curve where the slope is increasing at an increasing rate. This typically occurs early on. Plot a point at labor units = 2. This corresponds to where MP is increasing.
  • Diminishing Returns: Find the point on the TP curve where the slope is increasing at a decreasing rate. This occurs after the inflection point where the curve starts to flatten. Plot a point at labor units = 4. This corresponds to where MP is decreasing but positive.
  • Negative Returns: Find the point on the TP curve where the slope is negative, meaning total output starts to decrease. Plot a point at labor units = 8. This corresponds to where MP is negative.

Final Answer:

The graph should show the TP, MP, and AP curves plotted against labor units. Three points should be marked on the TP curve indicating increasing returns at approximately labor units = 2, diminishing returns at approximately labor units = 4, and negative returns at labor units = 8.

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