Quelpr
2 marksTheory of Supply

CAPE Economics Unit 1 · 2005 · Paper 2 · Question 1(c)

State what happens to average physical product (APP) and marginal physical product (MPP) as output increases.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 1(a)Copy and complete the table for APP, MPP, AVC, and MC.[12 marks]
  2. 1(b)(i)Define Average Physical Product (APP) OR provide the formula for calculating it.[2 marks]
  3. 1(b)(ii)Define Marginal Physical Product (MPP) OR provide the formula for calculating it.[2 marks]
  4. 1(b)(iii)Define Average Variable Cost (AVC) OR provide the formula for calculating it.[2 marks]
  5. 1(b)(iv)Define Marginal Cost (MC) OR provide the formula for calculating it.[2 marks]
  6. 1(d)State what happens to average variable cost (AVC) and marginal cost (MC) as output increases.[2 marks]
  7. 1(e)(i)Explain how output will be affected when a variable input is added to a fixed input.[4 marks]
  8. 1(e)(ii)Explain how increasing levels of output affect costs.[4 marks]
  9. 1(f)Draw a diagram showing the marginal cost curve (MC) and the price ($200) of the product.[12 marks]
  10. 1(g)Identify what level of output the firm will produce and state how you arrived at your answer.[6 marks]

More practice: the rest of this paper · more Theory of Supply questions · all CAPE Economics Unit 1 past papers