This is one of the data response questions and it was attempted by majority of the candidates. The question required the candidates to calculate the values of X, Y and Z in the (a) part, determine the level of employment of labour at which the firm experiences increasing, decreasing and negative returns in the (b) part, state the law of diminishing returns, draw the total product and marginal product curves and state any two relationships between the previously mentioned curves in the (c) and (d) parts of the question respectively. Most candidates who attempted this question were able to calculate the values of X, Y and Z in the (a) part, but were unable to give the full range of the level of employment of labour at which the firm experiences increasing and decreasing returns in the (b) part. Many of the candidates stated the law of diminishing returns correctly in the (c) part, but were unable to draw a well labelled graph and state the relationships between the total product and marginal product based on the curves drawn in the (d) part, hence they could not obtain the maximum mark.
The candidates were expected to provide the following answers to score higher marks.