ECON 201 Chapter Notes - Chapter 8: Sunk Costs, Root Mean Square, Average Variable Cost
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ECON 201 Full Course Notes
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Production function: a technological relationship that speci es how much output can be produced with speci c amounts of inputs. Technological ef ciency means that the maximum output is produced with the given set of inputs. Economic ef ciency de nes a production structure that produces output at least cost. Short run: a period during which at least one factor of production is xed. If capital is xed, then more output is produced by using additional labour. Long run: a period of time that is suf cient to enable all factors of production to be adjusted. Very long run: a period suf ciently long for new technology to develop. Total product is the relationship between total output produced and the number of workers employed, for a given amount of capital. Marginal product of labour is the addition to output produced by each additional worker. It is also the slope of the total product curve.