Question

Joan grows pumpkins. If Joan plants no seeds on her farm, she gets no harvest. If she plants 1 bag of seeds, she gets 500 pumpkins. If she plants 2 bags, she gets 800 pumpkins. If she plants 3 bags, she gets 900 pumpkins. A bag of seeds costs $100, and seeds are her only cost. Joan's production function exhibitsA. Increasing marginal product. B. Decreasing marginal product. C. Constant marginal product. D. Any of the above could be correct.

Answer 1

Answer: Option (B) is correct.

Step-by-step explanation:

Correct option: Decreasing marginal product.

Marginal product is the change in the level of output, when there will be an extra input employed in the production of a certain commodity.

So, Marginal Product =
`(change\ in\ Q)/(Change\ in\ I)`

Where,

Q = Output

I = Input

Marginal product of 1st bag = 500

Marginal product of 2nd bag =
`(800-500)/(2-1)` = 300

Marginal product of 3rd bag =
`(900-800)/(3-2)` = 100

∴ From the above calculations, we can seen that as we employed one more bag of seeds as a result marginal product goes on diminishing.

Hence, Joan's production function exhibits decreasing marginal product.