ECON 200 Lecture Notes - Lecture 19: Production Function, Marginal Product

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ivorysea-lion839

30 Aug 2018

School

University of Arizona

Department

Economics

Course

ECON 200

Professor

ALL

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ECON 200 Full Course Notes

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Document Summary

Production function in panel (a) shows the relationship between the number of workers hired and the quantity of output produced. The production function gets flatter as the number of workers increases, reflecting diminishing marginal product. Total-cost curve in panel (b) shows the relationship between the quantity of output produced and total cost of production. The total-cost curve gets steeper as the quantity of output increases because of diminishing marginal product. The marginal product of any input in the production process is the increase in the quantity of output obtained from one additional unit of that input. Diminishing marginal product - the property whereby the marginal product of an input declines as the quantity of the input increases. As more workers are hired, each additional worker contributes fewer additional outputs to total production. Slope of the production function measures the marginal product. As the number of workers increases, the marginal product declines, and the production function becomes flatter.

Related Questions

The diminishing marginal product explains why, as a firm’s output increases.

a. the production function and total-cost curve both get steeper

b. the production function and total-cost curve both get flattered

c. the production function gets steeper, while the total-cost curve gets flatter.

d. the production function gets flatter, while the total-cost curve gets steeper.

ultramarinebadger595

The following table shows the quantity of workers and total output for a local pizza shop. Use the table below to answer the following questions.

a) When the owner hires 4 workers, what is the average product of labor?

b) What is the marginal product of the fifth worker?

c) If the marginal product of the second worker is 6, what is the total number of pizzas produced when 2 workers are hired?

d) Assuming that the marginal product of the second worker is 6, with which worker hired does the law of diminishing returns set in?

Quantity of Workers	Total Output
0	0
1	5
2	a
3	19
4	24
5	28
6	26

beigeporcupine586

The law of eventually diminishing marginal returns: (Points : 1)

a. states that each and every increase in the amount of the variable factor employed in the production process will yield diminishing marginal returns.
b. is a mathematical theorem that can be logically proved or disproved
c. is the rate at which one input may be substituted for another input in the production process
d. None of the above

The marginal product is defined as: (Points : 1)

a. the ratio of total output to the amount of the variable input used in producing the output
b. the incremental change in total output that can be produced by the use of one more unit of the variable input in the production process
c. the percentage change in output resulting from a given percentage change in the amount of the variable input X employed in the production process with Y
d. None of the above

The rate at which one input X may be substituted for another input Y in a production process, while total output remains constant, is: (Points : 1)

a. the slope of the isoquant curve
b. the marginal rate of technical substitution

c. equal to MPx/MPy

d. all of the above
e. none of the above

Marginal revenue product is: (Points : 1)

a. defined as the amount that an additional unit of the variable input adds to the total revenue
b. equal to the marginal factor cost of the variable factor times the marginal revenue resulting from the increase in output obtained
c. equal to the marginal product of the variable factor times the marginal product resulting from the increase in output obtained
d. a and b
e. a and c

Marginal factor cost is defined as the amount that an additional unit of the variable unit of the variable input adds to ____________. (Points : 1)

a. marginal cost
b. variable cost
c. marginal rate of technical substitution
d. total cost
e. none of the above

In the Cobb-Douglas production function Q=aL^?1.K^?2 ______________. (Points : 1)

a. the marginal product of labor (L) is equal to ?1
b. the average product of labor (L) is equal to ?2
c. if the amount of labor input (L) is increased by 1 percent, then output will increase by ?1 percent
d. a and b
e. a and c