Textbook Notes (368,122)
Canada (161,660)
Economics (818)
ECON 2310 (47)
Chapter 7

Chapter 7 Intermediate Micro Notes

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ECON 2310
Johanna Goertz

Chapter 7 Economics NotesTechnologyProduction71 Production TechnologiesOutputs The physical products or services a firm producesInputs The materials labour land or equipment that firms use to produce their outputsProduction Technology summary of all a firms possible methods for producing output In production over any given time period an input is fixed if it cant be adjusted and variable if it can beIn short run 1 or more inputs is fixed In long run all inputs are variable72 Production With One Variable Input 2 useful measures of a workers productivity are average and marginal products of labourAverage Product of LabourAP QFLLLLMarginal Product of labourMeasures how much extra output is produced when firms change the amount of labour used by a little bitMP Q FLFL LLLLLaw of Diminishing Marginal Returns states the general tendency for the marginal product of an input to eventually decline as its use is increased holding all other inputs fixed By comparing average and marginal product we can tell whether the average product rises or falls as more input it addedIf Marginal product is greater than average product it pulls average product upUsing the Marginal Product of Labour to Make Product Decisions
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