Question

3. The economic student association at the University X is hiring students to make banners “I love economics” for the coming conference. Complete the following table and plot the production function and the cost function for producing banners. (Marks 10) Number of Output Marginal Cost of Cost of Total Cost Students Product of Equipment Students Hired Hired Labour 100 100 100 140 240 100 180 300 100

Answer 1

Ans:

Number of Students Hired	Output	Marginal Product of Labor	Cost of Equipment	Cost of Students Hired	Total Cost
0	0	0	100	0	100
1	100	100	100	20	120
2	180	80	100	40	140
3	240	60	100	60	160
4	280	40	100	80	180
5	300	20	100	100	200

Explanation:

Marginal Product = Change in output / Change in number of students hired

Total cost =  Total Fixed cost + Total Variable cost

( Here , Cost of Equipment = Total Fixed Cost and Cost of Students Hired = Total Variable cost )

Ans: Production function graph is shown below.

Output & Marginal Product Output MP 1 5 6 2 3 4 Number of students Hired

Ans: Cost function graph is shown below.

Total cost , Cost of equipment and cost of sudents hired Cost of Equipment Cost of Students Hired Total Cost 0 50 100 250 300 350 150 200 Output