Chapter 13

# Chapter 13 - Chapter 13 The Costs of Production What are...

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Chapter The Costs of Production 13

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What are Costs? 22
What are Costs? 33

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What are Costs? 44
What are Costs? 55

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What are Costs? 66
Figure Economists versus 77 Economists include all opportunity costs when analyzing a firm, whereas accountants measure only explicit costs. Therefore, economic profit is smaller than accounting profit

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Production and Costs 88
Production and Costs 99

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Table A production function and 10 Number of workers Output (quantity of cookies produced per hour) Margin al produc t of labor Cost of factor y Cost of worker s Total cost of inputs (cost of factory + cost of workers) 0 1 2 3 4 5 6 0 50 90 120 140 150 155 \$30 30 30 30 30 30 30 \$0 10 20 30 40 50 60 \$30 40 50 60 70 80 90 50 40 30 20 10 5
Figure T o t a l C o s t 50 40 30 20 10 80 70 60 \$90 Q u a n t i t y o f O u t p u t ( c o o k i e s p e r h o 100 80 60 40 20 160 140 120 Caroline’s production function 11 (a) Production function The production function in panel (a) shows the relationship between the number of workers hired and the quantity of output produced. Here the number of workers hired (on the horizontal axis) is from the first column in Table 1, and the quantity of output produced (on the vertical axis) is from the second column. The production function gets flatter as the number of workers increases, which reflects diminishing

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## This note was uploaded on 04/05/2011 for the course ACC 211 taught by Professor Seargent during the Spring '09 term at Grand Valley State.

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Chapter 13 - Chapter 13 The Costs of Production What are...

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