a) Distinguish between stock and supply.

b) Complete the following schedule:


b)



Total Physical Product (TPP) = Average Physical Product (APP) * Units of inputs (Q).


Average Physical Product (APP) = TPP/Q


Marginal Physical Product (MPP) = TPPn– TPPn-1


• APP (u=1) = 100/1 = 100


• TPP (u=2) = 140+100 = 240 (as MPP = TPPn– TPPn-1)


• APP (u=2) = 240/2 = 120


• TPP (u=3) = 140*3 = 420


• MPP (u=3) = 420-240 = 180


• APP (u=4) = 480/4 = 120


• MPP(u=4) = 480-420 = 60


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