1 Add columns to the table and calculate the values for : Marginal Product of Labor (MPL), Total Variable Cost (TVC), Total Fixed Cost (TFC), Total Cost (TC), Average Variable Cost (AVC), Average Fixed Cost (AFC), Average Total Cost (ATC), and Marginal Cost (MC) On two sets of axes, graph the Total Product and Marginal Product curves Be sure to label curves and axes and remember to plot marginal product using the midpoint convention Indicate the point on each graph at which diminishing marginal returns appears to begin Graph Total Variable Cost, Total Fixed Cost, and Total Cost on another set of axes Indicate the point on the graph at which diminishing marginal returns appears to begin Graph the Average Fixed Cost, Average Variable Cost, Average Total Cost, and Marginal Cost curves on another set of axes Indicate the point at which diminishing marginal returns appears to begin The table below shows the long-run average cost of producing knives: Knives per hour 1,000 2,000 3,000 4,000 5,000 6,000 Cost per knife $2 $1.50 $1.00 $1.00 $1.20 $1.30 Draw the long-run average cost curve for knives Shade the regions corresponding to economies of scale, constant returns to scale, and diseconomies of scale In the region of the long-run average cost curve that corresponds to economies of scale, what is happening to the cost per knife? In the region of the long-run average cost curve that corresponds to constant returns to scale, what is happening to the cost per knife? Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 461