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Terms in this set (15)
What is a production function
A production function shows how a change in the amount of a single variable input changes total output
What is the short run?
Short period, eye brief, only variable input (labor) can be changed
What is the long run?
Period long enough for a firm to adjust the of all productive services (C,E,L,L)
What is the total product?
Total output produced by each number of workers
What is marginal product?
Extra output or change in total product due to the increase of one or more units of input
What is the first stage of production
Increasing marginal returns
What is the criterion for determining how long total output will rise at an increasingly faster rate?
The number of workers
When do companies try to hire kore workers
When they need more product, total output to increase
What is the second stage of production
Decreasing marginal returns
What happens to the rate of increase in total production during this stage
It increases, but by smaller amounts
What is the principle of diminishing returns
Output increases at a smaller rate as more units of variable input are added
What is stage three of production
Negative marginal returns
What happens to marginal product during this stage
What happens to total output during this stage
It decreases because the firm hired too many workers
What effect does this stage have on hiring
There hired too many people and the workers got in each other's way. The firm will have to hire less or fire workers, or not hire any workers for a while
What are the major types of non-food uses of ruminants in developing countries
with shifts, the flatter the curve, the higher the impact on
suppose your parents are thinking of buying you a brand new car as a graduation present. economists would argue that it would be better if:
Refer to the above diagram, which shows three demand curves for coffee. Which would cause the change in the quantity of coffee demanded illustrated by the shift from point a to point b?
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