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ECON 101 2Midtermreview

The gains from trade for consumers is measured by

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Unformatted text preview: on two factors: Technology Prices of factors of production Technology Technological change influences both the productivity curves and the cost curves. An increase in productivity shifts the average and marginal product curves upward and the average and marginal cost curves downward. If a technological advance brings more capital and less labour into use, fixed costs increase and variable costs decrease. In this case, average total cost increases at low output levels and decreases at high output levels. Prices of Factors of Production An increase in the price of a factor of production increases costs and shifts th...
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