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Unformatted text preview: ECON1110 TA Section 8 Professor Jennifer Wissink TA Jingxian Zheng March 12, 2009 1 Concepts Review 1. General concepts should be understood well:- total, fixed, variable- average, marginal- long-run, short-run- all related to each other 2. Production • Production Function: It shows the input requirement for each level of output. Q output = f ( X 1 ,X 2 ,X 3 , ··· ) where X 1 , X 2 , X 3 , ··· are inputs (factors of production) A fixed factor is one that does not vary as the quantity produced increases or de- creases.e.g., managerial time, machinery. A variable factor is one that must be increased in order to increase output. e.g., labor. Short run implies there exists at least one fixed factor. Long run implies no fixed factors. Suppose there is only one variable factor: labor • Total product of labor (Graph 1): TP L = f ( L ) holding everything else constant. Law of diminishing marginal productivity : the amount of extra product generated by each additional unit of the input, holding other inputs constant, declines....
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This note was uploaded on 09/19/2009 for the course ECON 101 taught by Professor Burkhauser during the Fall '08 term at Cornell.
- Fall '08