In this subject, Principles of Economics, the topic
that I like the most is topic 7, Market Competition ( part 1), this topic is
about Monopoly in the market. We actually play the Monopoly Board Game during
the class, after playing the board game, I finally understand what the word
Monopoly means and how the monopoly conquer the market.
Apart from that, the topic that I found most useful
and applicable in my daily life is topic 2, which is Price theory (part 1),
this topic is about market demand, how the demand curve moves and shifts in the
market. It is useful because it happens to my daily life, before I learn this,
I know the market is working like that but I don't know the name, now i know it
is Price theory.
I think that Principles of Economics is not a very
tough subject, although it was not tough, but it does not mean that it is easy
to score because there is a lot of theory and graphs to understand and draw. If
we don't pay enough attention in class, it is quite hard to understand the
theory through the lecture notes. It is also very important for me to complete
the tutorial questions because the questions help me a lot to revise what I
have learnt in the lecture and I understand those graphs and theory better
through these questions. Again, I found that the lectures that we have to read
ourselves are very hard for me to understand and I easily forget them.
Economics Exercise – Topic 6.0
1.
Define
marginal product. Also provide one suitable example.
2.
The
following table shows the total product for a bread factory. Complete the
table.
Raw Materials
|
1
ton
|
2
t
|
3
t
|
4
t
|
5
t
|
6 t
|
Total Product
|
5000
|
7000
|
8500
|
9500
|
10000
|
10000
|
Marginal Product
|
5000
|
3.
Based
on the answers from Q2, is the factory experiencing the law of increasing or
diminishing returns? Why do you say so?
4.
Draw
the graphs of total product and marginal product (as per the lecture notes),
indicating the area where the laws of increasing and diminishing returns are at
work.
5.
What
is the Law of Diminishing Returns? What causes it? Can you provide an example
of your own to illustrate
this law?
6.
What
is the Law of Increasing Returns? And what causes it? Elaborate.
7.
How
is the cost per unit of product (say, a sushi roll) derived? In other words,
what is the formula for cost per unit of product?
8.
What
is fixed cost? Provide 2 examples. What happens to average fixed cost (AFC) when
total product increases? Explain and show the relevant graph.
9.
What
is variable cost? Provide 2 examples.
10. Draw the graph for average (or per
unit) variable cost. Why does the AVC curve have a “smiley” or “bowl” shape?
11. True or False?
a)
If the marginal product is rising, then total product will increase at a faster
rate.
b)
Fixed cost is constant at every level of output except zero. When a factory
produces no output, its fixed cost is also zero.
c)
In the short run, if a firm were to keep employing more inputs, then it can
increase the total product indefinitely (i.e. forever and ever).
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