ECON 2310 Chapter 7: Chapter 7 Intermediate Micro Notes
17 Dec 2011
School
Department
Course
Professor
Document Summary
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: 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 be. In short run 1 or more inputs is fixed. In long run all inputs are variable. 2 useful measures of a worker"s productivity are average and marginal products of labour . Average product of labour: apl = q = f(l) Measures how much extra output is produced when firms change the amount of labour used by a little bit. Mpl = (cid:209) q = f(l) f(l- (cid:209) l (cid:209) l (cid:209) l) If marginal product is greater than average product it pulls average product up.
