1. Warm Up Which type of supply would create smaller items such as M&M’s?
What are two types of change in supply?
What did you do this weekend?

2. Learning Goal: I will understand the theory of production.
Economics
Standard 12.2
Learning Goal: I will understand the theory of production.

3. I. Definition
Deals with the relationship between the factors of production and the output of goods & services.

4. DO NOT WRITE THIS DOWN RALLY ROBIN
WITH YOUR SHOULDER PARTNER LIST BACK AND FORTH THE 4 FACTORS OF PRODUCTION.
THINK TIME
GO!

5. II. Three Stages of Production
A. Stage I- Increasing Returns: is when the # of workers is increased and as a result output increases

6. B. Stage II-Diminishing Returns: i
B. Stage II-Diminishing Returns: i. production continues to increase by smaller & smaller amounts with added inputs ii. Additional workers add to output at a lesser rate

7. Stage III- Negative Returns
i. Too many workers are hired and output decreases