1. Production and Costs: You must show all of your work where calculations are required and you must include a brief explanation of approximately 20-30 words for written answers to receive full credit:
a. Marginal and Average Product: Suppose you are given the following information for Acme Spring Corp., a firm that produces large industrial springs.

Inputs of labor Total Product Marginal Product (MP)

0 0 --
1 20
2 45
3 67
4 87
5 103
6 115
7 125
8 130
9 130
10 128

i) Fill in the column for MP to complete the table above. Explain at least one calculation completely using the numbers given in order to receive credit.
ii) Does this production data illustrate the law of diminishing returns? Why or why not? If diminishing returns are present, at what amount of labor input does diminishing returns begin?

2. Short Run Production Costs: Suppose you are given the following information for a firm. Assume Total Fixed Costs (TFC) equal $40 and Total Variable Costs (TVC) are as shown below:

Output (Q) Total Fixed Costs (TFC) Total Variable Costs (TVC) Total Costs (TC) Marginal Costs (MC) Average Fixed Costs (AFC) Average Variable Costs (AVC) Average Total Costs (ATC)

0 $0 --- --- --- ---
1 $55.00
2 $75.00
3 $90.00
4 $110.00
5 $135.00
6 $170.00
7 $220.00
8 $290.00

Fill in columns for TFC, TC, MC, AFC, AVC, and ATC to complete the table above. AGAIN, MAKE SURE TO EXPLAIN AT LEAST ONE OF EACH CALCULATION IN EACH COLUMN USING THE NUMBERS GIVEN. ROUND ANSWERS TO 2 DECIMAL POINTS.

1. Production and Costs: You must show all of your work where calcu...