Question

From the information given in the table, identify different stages of production and state the related law.

Units of Labour	$0$	$1$	$2$	$3$	$4$	$5$	$6$	$7$	$8$	$9$
Units of Output	$0$	$4$	$12$	$24$	$32$	$36$	$36$	$28$	$16$	$2$

Answer 1

Units of Labour	Units of Output	$M{P}_L$	Stages
$0$	$0$	$0$	Increasing returns to a factor
$1$	$4$	$4$	Increasing returns to a factor
$2$	$12$	$8$	Increasing returns to a factor
$3$	$24$	$12$	Increasing returns to a factor/ Diminishing returns to a factor
$4$	$32$	$8$	Diminishing returns to a factor
$5$	$36$	$4$	Diminishing returns to a factor
$6$	$36$	$0$	Diminishing returns to a factor/ Negative returns to a factor
$7$	$28$	$-8$	Negative returns to a factor
$8$	$16$	$-12$	Negative returns to a factor
$9$	$2$	$-14$	Negative returns to a factor

The law of variable proportions is associated with this case.