13-17 summary.docx

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Department
Economics
Course
ECON 20A
Professor
Amihai Glazer
Semester
Fall

Description
Study Guide for Second Midterm Notes1Chapter 13 The costs of ProductionaMain PointsiA firms main goal is to maximize profitiiThe firms production process determines its costs The production functions shows the number of laborcapital used in the production proccess In this Graph we see how increase in out put that arises from an additional unit of inputworkers the Diminishing margin productlike the bakery who has to many workers Diminishing marginal product occurs when marginal product declines yet total output increases as the firm uses additional units of an inputiiifrom a firms data on total cost fixedvariable we can deduce several other very important measurements 1fixed costs costs that need to be paid regardless of how much is produced2variable costs costs that vary with the quantity of output produced3Average total cost total costquantity of outputathis tells us the cost of an output unit if total cost is divided evenly by all units of production4Marginal costathe increase in total cost that arises from another unit of productionbMC totalcostquantity
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