Chapter 54, Problem 1CYU

a)

To determine

The fixed input and the variable input

Explanation of Solution

The fixed input is the 10-ton machine which is fixed, and electricity is the variable input in this case.

Economics Concept Introduction

Introduction: Fixed input remains the same or constant and variable input changes from time to time to change the level of quantity produced.

b)

To determine

A table showing the marginal product of the variable input.

Explanation of Solution

Units of electricity	Quantity of ice	Marginal product
0	0	0
1	1000	1000
2	1800	800
3	2400	600
4	2800	400

As the numbers are declining in the third column of the table, therefore, electricity input exhibits diminishing returns because with each additional kilowatt of electricity the marginal product is less from the previous kilowatt.

Economics Concept Introduction

Introduction: Variable input changes from time to time to change the level of quantity produced.

c)

To determine

Current fixed input if a 50% increase in the size of the fixed input increases output by 100% for the variable input by constructing a table.

Explanation of Solution

A table showing the quantity of output and marginal product, in this case, would be shown as:

When there is a 50% increase in the size of the fixed input, then B has a machine of 15 tons that is used in the production of output. Therefore, the current fixed input is15-ton machine.

And, with a 100% increase in output for any given amount of electricity, the quantity of output and marginal product would be shown as:

A table showing the quantity of output and marginal product, in this case, would be shown as:

Units of electricity	Quantity of ice	Marginal product
0	0	0
1	2000	2000
2	3600	1600
3	4800	1200
4	5600	800

Economics Concept Introduction

Introduction: Fixed input remains the same or constant and variable input changes from time to time to change the level of quantity produced.