Production Cost Notes

Production Cost Notes - workers in order to permit greater...

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Production Cost Notes (Chapter 11) Payments for productive resources that the firm does not own and must purchase are called explicit costs. Payments for productive resources that the firm already owns are called implicit costs Economic profit is the excess of total revenue over total costs The short run is a period of time in the production process during which at least one resource cannot be altered The period of time in the production process during which all resources are variable is the termed the long run The production function refers to the relationship between the amount of resources used and he level of output. The division of labour refers to the specialization in the performance of tasks by
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Unformatted text preview: workers in order to permit greater efficiency and greater production • Marginal product (MP) is the addition to total output as a result of adding one more unit of a productive resource • Productivity refers to the amount of output produced by a unit of a certain resource during a specified period of time. • Productivity Factors: o The structure of the economy o Economic conditions o Government policies o Scale of business operations o Management techniques o Quantity and quality of capital o Labour force • Multifactor productivity measures indicates the level of productivity in an industry by taking into consideration all relevant resources, not only labour resources...
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This note was uploaded on 02/05/2011 for the course ECON 011 taught by Professor Yezer during the Fall '07 term at GWU.

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