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