Economics - 0353

Economics - 0353 - CHAPTER FIG URE 1 2 1 12 B E H I N D T...

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C H A P T E R 12 BEHIND THE SUPPLY CURVE: INPUTS A N D COSTS 305 FIGURE 1 2 -1 Production Function and Total Product Curve for George and Martha's Farm Marginal product Quantity Quantity of labor of labor L of wheat Q MPL = AQ/AL (workers) (bushels) (bushels per worker) The table shows the production function, the relationship between the quantity of the variable input (labor, measured in number of workers) and the quantity of output (wheat, measured in bushels) for a given quantity of the fixed input. It also calculates the marginal product of labor on George and Martha's farm. The total product curve shows the produc- tion function graphically. It slopes upward because more wheat is produced as more workers are employed. It also becomes flatter because the marginal product of labor declines as more and more workers are employed. fixed input; it is called the farm 's total product curve. The physical quantity of o u t- put, bushels of w heat, is m easured on the vertical axis; the quantity of the variable
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