ECON 101 2Midtermreview

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Unformatted text preview: he quantity of labour employed. Product Curves Product curves are graphs of the three product concepts that show how total product, marginal product, and average product change as the quantity of labour employed changes. The total product curve is similar to the PPF. It separates attainable output levels from unattainable output levels in the short run. Almost all production processes are like the one shown here and have: Increasing marginal returns initially Diminishing marginal returns eventually Figure 11.2 shows the marginal product of labour curve and how the marginal product curve relates to the total product curve. The first worker hired produces 4 units of output. Increasing Marginal Returns Initially When the marginal product of a worker exceeds the marginal product of the previous worke...
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