last econ notes

last econ notes - New Econ Notes What were going to learn?...

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New Econ Notes What were going to learn? 1. Production, profit and property rights 2. Game Theory 3. Information Inputs- Anything that in any way contributes to production Production function- The relationship between inputs and output. Total product- the amount of output obtained in total form a given quantity of input. Marginal product- the change in the total product that results from a 1-unit increase in an input, holding the amounts of all other inputs constant. The “law” of diminishing marginal product- as more of one factor of production is used with a fixed quantity of other factors; the marginal product of the expanding factor ultimately decreases. Average product- the total product divided by the quantity of an input. How many should the firm hire if wl= $40 and P= $10? Inputs Total Product Marginal Product MRP Hire? Profit ARP 1 3 3 $30 Y -10 30 2 8 5 50 Y 0 40 3 15 7 70 Y 30 50 4 21 6 60 Y 50 53 5 26 5 50 Y 60 52 6 30 4 40 Y 60 50 7 33 3 30 N 50 47 8 35 2 20 N 30 44 9 36 1
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last econ notes - New Econ Notes What were going to learn?...

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