ARE 1150 Lecture Notes - Lecture 14: Marginal Product, Marginal Cost, Opportunity Cost
Document Summary
Technology- processes a firm uses to turn inputs into outputs of goods and services. Technological change- change in the ability of a firm to produce a given level of output with a given quantity of inputs. Short run- at least one of a firm"s inputs is fixed. Long run- firm can vary all its inputs, adopt new technology, and increase or decrease the size of its physical plant. Total cost- costs of all the inputs a firm uses in production. Variable costs- costs that change as output changes. Fixed costs- costs that remain constant as output changes. Production function- relationship between the inputs employed by a firm and the maximum output it can produce with those inputs. Atc- total cost divided by the quantity of output produced- u-shape. Marginal product of labor- additional output a firm produces as a result of hiring one more worker.