Using the table below, calculate the marginal and average products. Given that the values of A and B in the table above are the corresponding values such that B is the first two digit of your personalized matriculation number and A is the last two non-zero digit. (b) Define Income elasticity of demand showing the formula. (c) In the face of the recent economic recession in Nigeria, there is need for a plan B: The 'No CHICKEN' THEORY. Discuss the concept, stating 5 'Chickens' to be avoided by a student in this situation.

Completed Production Table (units of labor and packs of milk) |c|c|c|c| Labor (L) & Total Product (TP) & Average Product (AP) & Marginal Product (MP) \\ 0 & 0 & - & - \\ 1 & 10 & 10 & 10 \\ 2 & 17 & 8.5 & 7 \\ 3 & 23 & 7.67 & 6 \\ 4 & 28 & 7 & 5 \\ 5 & 32 & 6.4 & 4 \\ Step 1: Marginal Product (MP) calculations Formula: MP_L = TP_L - TP_L-1 (packs of milk per unit labor) L=1: MP_1 = 10 - 0 = 10 packs per labor L=2: MP_2 = 17 - 10 = 7 packs per labor L=3: MP_3 = 23 - 17 = 6 packs per labor L=4: MP_4 = 28 - 23 = 5 packs per labor L=5: MP_5 = 32 - 28 = 4 packs per labor Step 2: Average Product (AP) calculations Formula: AP_L = TP_LL (packs of milk per unit labor) L=1: AP_1 = (10)/(1) = 10 packs per labor L=2: AP_2 = (17)/(2) = 8.5 packs per labor L=3: AP_3 = (23)/(3) ≈ 7.67 packs per labor L=4: AP_4 = (28)/(4) = 7 packs per labor L=5: AP_5 = (32)/(5) = 6.4 packs per labor [a] Using this situation, why Chola cannot fetch cash K1000s of packing milk Chola faces diminishing marginal returns: MP falls from 10 to 4 packs per additional labor. The firm hires labor until Marginal Revenue Product (MRP = price × MP) equals wage. Beyond L=3 or 4, low MP means MRP < wage, so no more hiring. Maximum TP=32 packs limits total revenue (cash), cannot reach K1000s without higher price or more efficient labor. [b] Distinguish between income elasticity for normal and inferior goods Income elasticity of demand: _I = (\% Q_d)/(\% I) Normal goods: _I > 0 (luxury: >1; necessity: 0 < _I < 1) – demand rises as income rises. Inferior goods: _I < 0 – demand falls as income rises (e.g., cheap staples). Law of demand holds for price, but income effect differs. [c] What influences consumption (quantity demanded) of goods Factors (ceteris paribus): 1. Price of good: P Q_d (law of demand). 2. Income (I). 3. Prices of related goods (substitutes/complements). 4. Tastes/preferences. 5. Expectations. 6. Number of buyers/population. [d] Explain the nature of the relationship between price and quantity supplied Upward-sloping supply curve: higher price higher quantity supplied. Reason: Higher P raises MRP, firms supply more (move along MC curve). Positive relationship: ( Q_s)/( P) > 0. [e] Define price elasticity of demand (using lecture notes) Price elasticity of demand (E_d): E_d = (\% Q_d)/(\% P) = ( Q_d / Q_d)/( P / P) Measures responsiveness of quantity demanded to price change. Elastic (|E_d| > 1), inelastic (|E_d| < 1), unit (|E_d|=1). [f] Short note on cross elasticity of demand Cross price elasticity (E_xy): E_xy = \% Q_d_x\% P_y Substitutes: E_xy > 0 ( P_y Q_d_x). Complements: E_xy < 0. Unrelated: E_xy = 0. Used to classify related goods. See completed table and steps above