Nimbus Ltd makes brooms and then sells them door-to-door.Here is the relationship between the number of workers and Nimbus's output during a given day. Workers: 0, 1, 2, 3, 4, 5, 6, 7 Output: 0, 20, 50, 90, 120, 140, 150, 155 Marginal product: ? Total cost: Average total cost: Marginal cost: a) Fill in the column of marginal products.What pattern do you see? How might you explain it? b) A worker costs $100 a day and the firm has fixed costs of $200. Use this information to fill in the column for total cost. c) Fill in the column for average total cost.(Recall that ATC=TC/Q.)What pattern do you see? d) Now fill in the column for marginal cost. (Recall that MC=ΔTC/ΔQ.)What pattern do you see? e) Compare the column for marginal product with the column for marginal cost. Explain the relationship. f) Compare the column for average total cost with the column for marginal cost.Explain the relationship.

Nimbus Pty Ltd makes brooms and sell them door-to-door.The relationship between the number of workers employed by Nimbus andthe number of brooms produced is provided in Table 2 below. Nimbus hasÖxed costs of $200 per day from renting its factory a day in advance. Theprice per worker per day is $100.(a) (8 marks) Fill in the blank columns in following table.Workers Output Marg.Prod.FixedCostVariableCostTotalCostAFC AVC ATC MarginalCost =(
TC=
y)0 0 ñ 200 0 ñ ñ ñ ñ1 20 200 1002 50 200 2003 90 200 3004 120 200 4005 140 200 5006 150 200 6007 155 200 700(b) (4 marks) Discuss the relationship between the short-run marginalcost and the marginal product of labor.(c) (4 marks) Discuss the relationship between short-run average totalcost and short-run marginal cost.1(d) (4 marks) Discuss the relationship between short-run average variablecost and short-run marginal cost.(e) (1 mark) Discuss the relationship between short-run total variablecost, short-run total Öxed cost, and short-run total cost.(f ) (4 marks)Discuss the relationship between short-run average variablecost, short-run average Öxed cost, and short-run average total cost.

Workers: 0, 1, 2, 3, 4, 5, 6, 7 Output: 0, 20, 50, 90, 120, 140, 150, 155 Marginal product: ? Total cost: Average total cost: Marginal cost:

(7 marks) Still under the assumption that YYS rents lawn mowersfor $4 per day and pays workers $6 per day, suppose that YYS hasentered into a contract to rent exactly Öve lawn mowers for today, sothe only factor YYS can vary in the short run (that is, today) is thenumber of workers they engage to mow lawns today. Determine thefollowing:total product of labor, marginal product of labor, average productof labor, short-run total cost, short-run variable cost, short-run Öxedcost, short-run average cost, short-run variable cost, short-run averageÖxed cost, short-run marginal cost

Fill in the Blank QuestionFill in the blank question.In an imperfectly competitive market, a price accompanying each increase in output (total product) applies not only to the marginal of each successive worker but also to all prior output units that otherwise could have been sold at a(n) price.

Now see the column for marginal cost. (Recall that MC=ΔTC/ΔQ.)What pattern do you see? Workers: 0, 1, 2, 3, 4, 5, 6, 7 Output: 0, 20, 50, 90, 120, 140, 150, 155 Total cost: 200, 300, 400, 500, 600, 700, 800, 900 Marginal cost: 0, 5, 3.33, 2.5, 3.33, 5, 10, 20