Textbook Notes (369,133)
Canada (162,403)
Economics (818)
ECON 2310 (47)
B Ferguson (11)
Chapter 7

Chapter 7- Technology and Production.pdf

2 Pages

Course Code
ECON 2310
B Ferguson

This preview shows 80% of the first page. Sign up to view the full 2 pages of the document.
Chapter 7- Technology and Production October 6, 2013 8:19 PM Definitions Outputs- the physical products or services a firm produces Inputs- the materials, labour, land, or equipment that firms use to produce their outputs Production Technology- a firms production technology summarizes all of its possible methods for producing its output Efficient- a production method it efficient if there is no other way to produce a larger amount of output using the same amounts of inputs Production Possibilities Set- contains all the combinations of inputs and outputs that are possible given the firm's technology Efficient Production Frontier- contains the combinations of inputs and outputs that a firm can achieve using efficient production methods Production Function- a function of the form , giving the amount a firm can produce from given amounts of inputs using efficient production methods Variable Input- can be adjusted over time Fixed Input- cannot be adjusted over time Short Run- a period of time over which one or more inputs is fixed Long Run- a period of time over which all inputs are variable Average Product of Labour- the amount of output divided by the number of workers employed Marginal Product of Labour- equals the extra output produced due to the marginal united of labour, per unit of labour added Marginal Units of Labour- the last units hired, where is the smallest amount of labour an employer can add or subtract Law of Diminishing Returns- states the general tendency for the marginal product of an input to eventual decline as its increased, holding all other inputs equal Isoquant- identifies all the input combinations that efficiently produce a given amount of output Family of Isoquants- consists of a firms isoquants corresponding to all of its possible output levels Marginal Rate of Substitution (MRTS) - the rate at which a firm must replace units of X with units of Y to keep output unchanged starting at a given input combination, when the changes involved are tiny. It equals the slopw of the firm's isoquant at this input combination, times -1 Declining Marginal Rate of Technical Substitution- an isoquant for a production process, using two inputs, X and Y, has a declining marginal rate
More Less
Unlock Document

Only 80% of the first page are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.