To login with Google, please enable popups

or

Don’t have an account? Sign up

To signup with Google, please enable popups

or

Sign up with Google or Facebook

or

By signing up I agree to StudyBlue's

Terms of Use and Privacy Policy

Already have an account? Log in

Reminder

Edit a Copy

Study these flashcards

Stacy O.

• 33

cards
What is marginal product of labor?

The additional output produced from an increase of one unit of labor.

What is the relationship between MP(L) and the total production function?

The marginal product of labor, at any point, is given by the slope (tangent) of the total product function on that same point.

What is the difference between short-run production and long-run production?

In the short run, there is one variable (primarily labor). The other (capital) is fixed.

In the long run, both inputs are variables.

Why would capital be fixed and labor be variable?

It takes time for a firm to adjust its inputs and produce its product with differing amounts of labor and capital. Capital takes time to build or order and deliver. Because of that a firm is unlikely to be *able* to substitute much capital for labor.

What is the average product of labor?

The output per unit of labor.

How do you calculate the average product of labor?

Total output/total quantity of labor (q/L)

**Example:**

Amount of labor = 3, Total output = 60

AP_{L} = 60/3 = 20

How do you calculate the marginal product of labor?

What happens to average product when marginal product is greater than it?

What happens when marginal product is less than average product?

When does average product reach its maximum?

How do you derive the marginal product curve from the production function?

At what point on the marginal product cure is total output maximized?

What is the law of diminishing marginal returns?

Calculate the marginal rate of technical substitution.

What is the marginal rate of technical substitution?

Is MRTS diminishing, increasing or constant?

True or False: MRTS proves that the production process needs a balanced mix of both inputs.

How is MRTS closely related to MP_{L} and MP_{K}?

Why are firms assumed to maximize production?

Definition of returns to scale

When is it a case where there are increasing returns to scale?

What are constant returns to scale?

What are decreasing returns to scale?

What is the main implication about the size of a firm if there are constant returns to scale?

Would it be better to be a small or large company if there are decreasing returns to scale?

Sign up for free and study better.

Anytime, anywhere.

Get started today!

Find materials for your class:

Download our app to study better. Anytime, anywhere.