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For more information, please see full course syllabus of AP Microeconomics

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Lecture Comments (26)
 2 answersLast reply by: Gautham PadmakumarWed Nov 11, 2015 8:13 PMPost by Jim Tang on July 20, 2015wait, since FC = 120 according to the first row, where did you get 180, 216, 324, and 408? 2 answersLast reply by: Professor Jibin ParkSun Nov 2, 2014 12:09 AMPost by Kenny Zeng on October 30, 2014Are you using Paul Krugman's book the Essentials of Economics? 1 answerLast reply by: Professor Jibin ParkSun Nov 2, 2014 12:13 AMPost by Rebecca Dai on October 29, 2014Why is the intersect of MC and ATC the minimum-cost output? Is it comparatively? Is it like the most efficient way (the ratio between cost and output is the smallest)? 1 answerLast reply by: Professor Jibin ParkSat Nov 1, 2014 11:59 PMPost by Rebecca Dai on October 29, 2014Why is total revenue is 0 when firms shut down? 4 answersLast reply by: Jim TangMon Jul 20, 2015 4:59 AMPost by Rebecca Dai on October 29, 2014Where does that 108 come from? 3 answersLast reply by: Professor Jibin ParkSat Nov 1, 2014 11:59 PMPost by Rebecca Dai on October 29, 2014In marginal cost, where do you get those numbers in total costs from? Shouldn't it be the sum of 120 (fixed cost) and VC? For example, in my opinion the total cost for 5 salsa should be 420. 1 answerLast reply by: Professor Jibin ParkFri Apr 18, 2014 1:22 PMPost by Justin Plumb on April 18, 2014When you were calculating ATC and AFC at Quantity 5 didn't you make a math error because 408/5 is 81.6 not 80 and 5/8 and 108/5 is 21.6 not 20 and 5/8? 1 answerLast reply by: Professor Jibin ParkThu Feb 27, 2014 12:24 AMPost by Mengyao Zhang on February 24, 2014Why should if price greater than AVC, then stay in business?  what about the fixed cost 1 answerLast reply by: Professor Jibin ParkThu Feb 27, 2014 12:25 AMPost by Mengyao Zhang on February 24, 2014how could we make sure which part of the graph is the deadweight loss   and does the  tax revenue equals to price change caused by tax multiple the corresponding quantity change  and so does the area.

### Production Function & Firm Costs

• Marginal Product of Labor refers to the amount of product that the hiring of one additional worker will produce.
• Increasing marginal returns means that an extra worker increases the rate of production.
• Diminishing marginal returns means that an extra worker decreases the rate of production but still increases the total production.
• Negative marginal returns means than an extra worker decreases the total production.
• The different cost curves facing businesses include Average Total Cost (ATC), Average Variable Cost (AVC), Average Fixed Cost (AFC) and Marginal Cost (MC).
• When the Marginal Cost (MC) and Average Total Cost (ATC) intersect, it will always be at the minimum point of the ATC.

### Production Function & Firm Costs

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

• Intro 0:00
• Lesson Overview 0:09
• II. Product Markets 0:55
• Long Run vs. Short Run 1:46
• Production Function
• Fixed Input
• Variable Input
• Long Run
• Short Run
• Marginal Product of Labor 3:03
• Definition of Marginal Product of Labor
• Example MPL Curve
• Different Types of Marginal Returns 7:18
• Increasing Marginal Returns
• Diminishing Marginal Returns
• Negative Marginal Returns
• Was Thomas Malthus Correct? 10:59
• Thomas Malthus Prediction
• Dismal Science
• Fixed, Variable and Total Cost 12:34
• Fixed Cost
• Variable Cost
• Total Cost
• Average Cost 15:27
• Marginal Costs 22:17
• Relationship Between ATC and MC Curves 27:02
• Minimum-Cost Output
• Output Less Than Minimum-Cost Output
• Output Greater Than Minimum-Cost Output
• Just Do It, Smile and Smirk 30:09
• MC Curve
• ATC Curve
• AVC Curve
• True or False, or Uncertain? 32:57
• Example 1
• Example 2
• Short-Run Total Cost Function Example 38:19