Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

132 THEORY OF PRODUCTION [CHAP. 6
(b) (See Fig. 6-12).
Remember that for the relations shown in Fig. 6-12 to hold, the fixed factor must be unity and we must assume
constant returns to scale.
6.8 On the same set of axes, draw “typical” smooth TP, AP, and MP curves for labor and land, and define the
stages of production.
Note that as we move from right to left in Fig. 6-13, the MP Land rises first, reaches a maximum, and then
declines in stage I for land. This is analogous to the behavior of the MP Labor in stage I for labor, for a movement
from left to right. This aspect of the behavior of the MP Land in stage I for land was not shown in Fig. 6-12.
6.9 With reference to stage II of production, (a) why does the producer operate in stage II, (b) what factor
combination (within stage II) will the producer actually use, and (c) where will the producer operate if
P Labor ¼ 0? If P Land ¼ 0? If P Labor ¼ P Land ?
Fig. 6-12
Fig. 6-13