Flashcards in Production in the Short Run 7.2-2-Jenna Bryant Deck (15)
What is the total product (TP) curve?
Graphically explains a firm's total output in the short run
What is marginal product (MP) of labor?
The change in output generated from adding one more unit of the variable input, labor
On the total product curve as labor changes then?
Total output changes
What does it mean that total product curve is a short-run curve?
Tachnology and all inputs except labor are held constant
What axis is labor on in the total product curve?
The x-axis; horizontal axis
What shape is the total product curve?
The total product curve is S-shaped
What part of the curve is convex?
At the lower end where labor and output are low
What is the phenonmenon that is a function of teamwork and specialization?
As more workers are added at low production levels, they can specialize in tasks and more efficiently use the fixed inputs
What is the curve doing when the output in increasing at an increasing rate?
It is convex
What happens to the curve when output is increasing at a decreasing rate?
It is concave
What happens when the total product curve reaches its maximum point?
The total product curve hits its maximum point after which output decreases with each additional worker
What is the formula for the marginal product of labor?
The change of total ouput that results from increasing the amount of variable input, labor, by 1 unit
What do teamwork and specialization lead to in the convex area of the TP curve?
It leads to increased productivity
After the maximum point on the TP curve what happens by adding addtional labor?
Labor becomes inefficient and output falls