Flashcards in Short-Run Costs 7.3-5- Marie Smith Deck (13):
Marginal product is the extra output that can be produced when you do what?
Add another worker.
What is the input that can be changed in the short run?
The variable input.
What is marginal cost?
The cost of producing an extra unit of output.
What kind of relationship do cost and productivity have?
It is reciprocal, when productivity goes up costs fall. When productivity goes down, costs increase.
The change in variable costs divided by the change in output (total product) equals what?
The change in total product divided by the change in labor equals what?
Marginal product of labor.
Another way to define marginal cost mathematically using wages would be?
MC= W (wages) divided by MP(L) (marginal product of labor)
Marginal product and marginal costs are related how?
Inversely, they are reciprocals of each other.
If a worker can produce 1/4 of a TV in a day ,How many workers does it take to produce 1 TV?
If the market wage is $1000 calculate marginal cost using MP(L) 1/4 TV.
With teamwork and cooperation, marginal product is rising. What is marginal cost doing?
Marginal cost is falling.
When marginal product is at it's maximum, where is marginal cost?
Marginal cost is at it"s minimum.