Textbook Notes (368,317)
United States (206,003)
Economics (276)
ECON 1116 (137)
Chapter 11

02.19.14 Chapter 11.docx

8 Pages
Unlock Document

ECON 1116
Osborne Jackson

Chapter 11 - The Production Function: is the relationship between the quantity of inputs a firm uses and the quantity of output it produces. - Fixed input: an input whose quantity is fixed for a period of time and cannot be varied. - Variable input: an input whose quantity the firm can vary at any time. - Long run: time period in which all inputs can be varied - Short run: time period in which at least one input is fixed. - Total product curve: shows how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input. - Marginal product: of an input is the additional quantity of output that is produced by using one or more unit of that input. Chapter 11 - Diminishing returns to an input: when an increase in the quantity of that input, holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input. Chapter 11 The position of the total product curve depends on the quantities of other inputs. - Fixed cost: a cost that does not depend on the quantity of output produced. It is the cost of the fixed input. - Variable cost: the cost that depends on the quantity of output produced. Is the cost of the variable input. - Total cost: of the producing a given quantity of ouput is the sum of the fixed cost and the variable cost of producing that quantity of output. o Total cost= Fixed Cost + Variable Cost Chapter 11 - Total cost curve: shows how the total cost depends on the quantity of output. Chapter 11 - Average total cost: referred to as average cost, is total cost divided by quantity of output produced Chapter 11 - Ushaped average total cost curve: falls at low levels of output, then rises at higher levels. Increasing output has 2 effects on average total cost 1. Spreading effect: larger the output the greater the quantity of output over which fixed cost is spread, l
More Less

Related notes for ECON 1116

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.