Production in the Short Run 7.2-2-Jenna Bryant Flashcards Preview

Econ 2106 Exam 2 > Production in the Short Run 7.2-2-Jenna Bryant > Flashcards

Flashcards in Production in the Short Run 7.2-2-Jenna Bryant Deck (15):
1

What is the total product (TP) curve?

Graphically explains a firm's total output in the short run

2

What is marginal product (MP) of labor?

The change in output generated from adding one more unit of the variable input, labor

3

On the total product curve as labor changes then?

Total output changes

4

What does it mean that total product curve is a short-run curve?

Tachnology and all inputs except labor are held constant

5

What axis is labor on in the total product curve?

The x-axis; horizontal axis

6

What shape is the total product curve?

The total product curve is S-shaped

7

What part of the curve is convex?

At the lower end where labor and output are low

8

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

9

What is the curve doing when the output in increasing at an increasing rate?

It is convex

10

What happens to the curve when output is increasing at a decreasing rate?

It is concave

11

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

12

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

13

What do teamwork and specialization lead to in the convex area of the TP curve?

It leads to increased productivity

14

After the maximum point on the TP curve what happens by adding addtional labor?

Labor becomes inefficient and output falls

15

What happens in the concave portion of the TP curve?

Production increases at a decreasing rate because addtional employees become less efficient