1 © ©1999 South-Western College Publishing PowerPoint Slides prepared by Ken Long Principles of Economics 2nd edition by Fred M Gottheil.

Slides:

Advertisements

Similar presentations

13.1 ECONOMIC COST AND PROFIT

Advertisements

10 Production and Cost CHAPTER. 10 Production and Cost CHAPTER.

Producer decision Making Frederick University 2013.

10 Output and Costs Notes and teaching tips: 4, 7, 23, 27, 31, and 54.

EFarmer.us Cost of Production. eFarmer.us - requires an outlay of money, - doesn’t require a cash outlay, ―paying wages ―paying rent ―paying interest.

Chapter 4: Elasticity Elasticity of Demand:

Chapter 8 – Costs and production. Production The total amount of output produced by a firm is a function of the levels of input usage by the firm The.

11 OUTPUT AND COSTS. 11 OUTPUT AND COSTS Notes and teaching tips: 5, 8, 26, 29, 33, and 57. To view a full-screen figure during a class, click the.

10 OUTPUT AND COSTS CHAPTER.

1 Chapter 8 Costs of Production Costs of Production Principles of Economics by Fred M Gottheil PowerPoint Slides prepared by Ken Long © ©1999 South-Western.

Module 14 Cost in the Short Run.

Short-Run Costs and Output Decisions

1 Chapter 7 Production Costs Key Concepts Summary Practice Quiz Internet Exercises Internet Exercises ©2002 South-Western College Publishing.

The Costs of Production 1 22 C H A P T E R Costs exist because resources Are scarce Productive Have alternative uses Use of a resource in a specific.

Economics 2010 Lecture 11 Organizing Production (I) Production and Costs (The short run)

CHAPTER 11 Output and Costs

Businesses and the Costs of Production 10 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

By: Christopher Mazzei. Viewpoints The owner of a company wants to keep costs down. An employee of the company wants a high wage or salary. There is always.

Copyright McGraw-Hill/Irwin, 2005 Economic Costs Short-Run and Long-Run Short-Run Production Relationships Short-Run Production Costs Short-Run.

1 Chapter 7 Production Costs Key Concepts Summary Practice Quiz Internet Exercises Internet Exercises ©2002 South-Western College Publishing.

Chapter 7 Production and Cost of the Firm

Chapter 23: The Firm - Cost and Output Determination

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. The Costs of Production Chapter 8.

1 Chapter 8 Costs and the Supply of Goods. 2 Overview  Shirking and the Principle-Agent Problem  The 3 Types of Business Firms  Economic vs. Accounting.

Supply: The Costs of Doing Business CHAPTER 8 © 2016 CENGAGE LEARNING. ALL RIGHTS RESERVED. MAY NOT BE COPIED, SCANNED, OR DUPLICATED, IN WHOLE OR IN PART,

Aim: What are short-run production costs? Do Now: What are explicit costs? Implicit costs?

Cost & Production Theory Firms seek to produce any given quantity of output (Q) at lowest cost. Firms are cost minimizers.

SAYRE | MORRIS Seventh Edition A Firm’s Production Decisions and Costs in the Short Run CHAPTER 6 6-1© 2012 McGraw-Hill Ryerson Limited.

Principles of Microeconomics : Ch.13 Second Canadian Edition Chapter 13 The Costs of Production © 2002 by Nelson, a division of Thomson Canada Limited.

Economies of Scale Chapter 13 completion. The Shape of Cost Curves Quantity of Output Costs $ MC ATC AVC AFC.

Managerial Economics Short-Run Production

Production and Cost CHAPTER 13 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Explain how.

1 Module 14 Cost in the Short Run. ObjectivesObjectives  Understand the relationship between the short run production function and short run costs. 2.

The Costs of Production

1 Production Costs Economics for Today by Irvin Tucker, 6 th edition ©2009 South-Western College Publishing.

1 © ©1999 South-Western College Publishing PowerPoint Slides prepared by Ken Long Principles of Economics 2nd edition by Fred M Gottheil.

1 Production Costs ©2006 South-Western College Publishing.

1 Costs of Production 2 COSTS (in Economics) that deal with forgoing the opportunity to produce alternative goods and services. The OPPORTUNITY COST.

Short-Run Production Costs. fixed input Any resource for which the quantity cannot change during the period of time under consideration.

CONTEMPORARY ECONOMICS© Thomson South-Western 5.3Production and Cost  Understand how marginal product varies as a firm hires more labor in the short run.

Cost Curve Model Chapter 13 completion. Costs of Production Fixed costs - do not change with quantity of output Variable costs - ↑ with quantity of output.

A.P. Microeconomics Daily: Draw & label no the same axis set, TFC, AFC & TVC.

Lecture notes Prepared by Anton Ljutic. © 2004 McGraw–Hill Ryerson Limited A Firm’s Production and Costs in the Short Run CHAPTER SIX.

EFarmer.us - requires an outlay of money, - doesn’t require a cash outlay, ―paying wages ―paying rent ―paying interest ―the owner’s time ―the owner’s property.

1 © ©1999 South-Western College Publishing PowerPoint Slides prepared by Ken Long Principles of Economics 2nd edition by Fred M Gottheil.

Production Function and Costs Lesson The Production Function (54) The Production Function is the relationship between inputs to a business.

1 Module 14 Cost in the Short Run. Objectives:Objectives:  Understand the relationship between the short run production function and short run costs.

Copyright ©2003, South-Western College Publishing Contemporary Economics: An Applications Approach By Robert J. Carbaugh 2nd Edition Chapter 4: Production.

Chapter 6 Production, Cost, and Profit © 2001 South-Western College Publishing.

Chapter 4: Production and the Costs of Production

Businesses and the Costs of Production

Chapter 8 Costs of Production 6/15/2018.

10 Businesses and the Costs of Production McGraw-Hill/Irwin

Cost Curve Model Chapter 13 completion.

Costs of Production Microeconomics.

Production & Costs in the Short-run

Chapter 6 Production Costs

1.5 Theory of the Firm and Market Structures

Cost Curve Model Chapter 13 completion.

წარმოების დანახარჯები

Businesses and the Costs of Production

Economics Chapter 5: Supply.

Chapter 6 Production and Cost

Economies of Scale Chapter 13 completion.

Businesses and the Costs of Production

Chapter 7 Production Costs

Businesses and the Costs of Production

Presentation transcript:

1 © ©1999 South-Western College Publishing PowerPoint Slides prepared by Ken Long Principles of Economics 2nd edition by Fred M Gottheil

2 Chapter 8 Costs of Production 2/22/2016 © ©1999 South-Western College Publishing

3 This chapter discusses principles associated with Short and Long Run considerations Economies of Scale The Law of Diminishing Returns CostsEntrepreneurship © ©1999 South-Western College Publishing The Socioeconomic Environment

4 What is a Fixed Cost? Cost to a firm that does not vary with the quantity of goods produced © ©1999 South-Western College Publishing

5 What are examples of Fixed Costs? rent or mortgage loan payments a part of utilities © ©1999 South-Western College Publishing

6 What are some other names for Fixed Cost? Sunk and Historical © ©1999 South-Western College Publishing

7 What is a Variable Cost? Cost that varies with the quantity of goods produced © ©1999 South-Western College Publishing

8 What are examples of Variable Costs? worker’s wages raw materials some utilities some taxes © ©1999 South-Western College Publishing

9 What is Labor Productivity? The output per laborer per hour © ©1999 South-Western College Publishing

10 Under what condition is it cheaper to pay $10 an hr. to a U.S. worker than $1 an hour to a foreign worker? © ©1999 South-Western College Publishing

11 © ©1999 South-Western College Publishing If the U.S. worker is more than 10 times as productive as the foreign worker

12 Why do labor costs increase as more units of labor are hired? Price of labor increases Quality of labor decreases Labor productivity decreases © ©1999 South-Western College Publishing

13 Why do non-labor, variable costs increase as output increases? Resources become more scarce © ©1999 South-Western College Publishing

14 Does the cost of all resources increase more than production increases? No, the costs of some resources may vary proportionately with the level of production © ©1999 South-Western College Publishing

15 What is Total Variable Cost? The sum of specific variable costs in the firm’s cost structure © ©1999 South-Western College Publishing

16 16 © ©1999 South-Western College Publishing Total Variable Costs $ Q

17 What are Total Costs? Cost to the firm that includes both fixed and variable costs © ©1999 South-Western College Publishing

18 18 © ©1999 South-Western College Publishing Total Costs $ Q TFC TC TVC

19 What is Average Total Cost? Total cost divided by the quantity of goods produced © ©1999 South-Western College Publishing

20 What is Average Fixed Cost? Total fixed cost divided by the quantity of goods produced © ©1999 South-Western College Publishing

21 What is Average Variable Cost? Total variable cost divided by the quantity of goods produced © ©1999 South-Western College Publishing

22 Quantity ATC AVC Avg. Fixed Costs 22 Costs

23 What is Marginal Cost? The change in total cost generated by a change in the quantity of a good produced © ©1999 South-Western College Publishing

24 24 © ©1999 South-Western College Publishing MC = Q TC

25 Why does MC = ATC at minimum ATC? If the marginal is above the average, the average increases If the marginal is below the average, the average decreases © ©1999 South-Western College Publishing

26 Costs Quantity ATC AVC MC Avg. Fixed Costs 26

27 What is the Short Run? A time in which producers can change some, but not all of its resources © ©1999 South-Western College Publishing

28 What is the Long Run? The time in which producers can change quantity of all resources © ©1999 South-Western College Publishing

29 What are Economies of Scale? When a firm increases resources in the long run and ATC decreases © ©1999 South-Western College Publishing

30 What are Diseconomies of Scale? When a company increases resources in the long run and ATC increases © ©1999 South-Western College Publishing

31 What are different views concerning downsizing? © ©1999 South-Western College Publishing

32 Are cost structures Culture-bound? Yes, the social and economic environment is as important a factor as the factors of production © ©1999 South-Western College Publishing

33 What is a Fixed Cost? What is a Variable Cost? What are Total Costs? What is Marginal Cost? What is the Short Run? What is the Long Run? What are Economies of Scale? What are Diseconomies of Scale?

34 ENDEND © ©1999 South-Western College Publishing