Lec11 - Time Frames u short run - at least one input is...

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1 Time Frames u short run - at least one input is fixed u does not vary with output u must be “used” u long run - all inputs variable u increases with output u is not used if no output is produced Production Function u production function u maximum output produced as a function of inputs, all else constant Factor Total Product Average Product Marginal Product 0 0 - 2 40.0 20.0 4 68.0 17.0 6 88.0 14.7 8 103.0 12.9 10 115.0 11.5 12 125.0 10.4 14 134.0 9.6 16 142.0 8.9 18 149.0 8.3 20 155.0 7.8 20.0 14.0 10.0 7.5 6.0 5.0 4.5 4.0 3.5 3.0 0 40 80 120 160 200 0 2 4 6 8 10 12 14 16 18 20 Total Product TP u Average Product u output per unit of input u AP X = Q/x u Marginal Product u additional output from an additional unit of input, all else held constant u MP X = D Q/ D x Productivity Factor Total Product Average Product Marginal Product 0 0 - 2 40.0 20.0 4 68.0 17.0 6 88.0 14.7 8 103.0 12.9 10 115.0 11.5 12 125.0 10.4 14 134.0 9.6 16 142.0 8.9 18 149.0 8.3 20 155.0 7.8 20.0 14.0 10.0 7.5 6.0 5.0 4.5 4.0 3.5 3.0 x Q Q/x D Q/ D x u law of diminishing returns additional output from successive increases of one input will eventually diminish (other inputs held constant)
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2 Factor Total Product Average
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This note was uploaded on 10/10/2009 for the course ECON 101 taught by Professor Gerson during the Winter '08 term at University of Michigan.

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Lec11 - Time Frames u short run - at least one input is...

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