In this lesson, our instructor Jibin Park gives an introduction on production function and firm costs. He discusses long run verse short run, marginal product of labor, marginal returns, Thomas Malthus' prediction, fixed cost, variable cost, total cost, average costs, and marginal 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.
This book created a 5-step plan to help you study more effectively, use your preparation time wisely, and get your best score. This book includes two full-length practice exams modeled on the real test, all the terms and concepts you need to know to get your best score, and your choice of three customized study schedules.
This book includes an in-depth preparation for both AP economics exams. It features two full-length practice tests, one in Microeconomics and one in Macroeconomics, and all test questions answered and explained. It also features a detailed review of all test topics, which include: supply and demand, theory of consumer choice, economics in the public sector, costs, perfect and imperfect competition, monopolies, labor resources, game theory, the national income and gross domestic product, inflation and unemployment, fiscal policy, money and banking, monetary policy, economic growth, international trade and exchange, interest rate determination, and the market for loanable funds.