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Published byClara Kelley Modified over 9 years ago
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1.Productivity 2.Costs of Production
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Amount of goods and services produced per unit of input How efficiently their resources are being used in production
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TOTAL PRODUCT - product a company makes in a given time period, with given amount of input Also called Total output
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Marginal Product – Change in output by adding one more unit of input Product Schedule (87)
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What does changing level of input have on total and marginal product Add (one) input productivity increases to a point Eventually, it will result in negative marginal product
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Workers, machines. Ect.
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1.Increasing Marginal Returns 2.Diminishing Marginal Returns 3.Negative Marginal Returns
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Add worker = Total product levels increase
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At some point, adding more workers decreases marginal product Page 87
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At certain amount of labor input the total product goes down
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Fixed Costs Variable Costs Total Costs Marginal Costs
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Fixed Cost – Production cost does not change as level of output changes Rent Wear and Tear on Machines
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Variable Costs – cost change as level of output changes More ducks = more workers (91)
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Total Costs – Fixed costs plus variable costs
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Marginal Costs – additional costs of producing one more unit of output
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