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3 marksTheory of Supply

CAPE Economics Unit 1 · 2016 · Paper 2 · Question 2(b)(ii)

Context of the manufacture of electric fans

Explain the concept of the short-run in the context of the manufacture of electric fans.

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Other parts of this question

  1. 2(a)(i)Define the term 'total product'.[2 marks]
  2. 2(a)(ii)Define the term 'average product'.[2 marks]
  3. 2(a)(iii)Define the term 'marginal product'.[2 marks]
  4. 2(b)(i)Explain the law of diminishing returns in the context of the manufacture of electric fans.[3 marks]
  5. 2(c)Assess, with the aid of a diagram showing the three stages of production, the ideal production stage for electric fans.[13 marks]

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