ECON 1123 1st Edition Lecture10 Outline From Previous Lecture Lecture 10 Class was canceled so no outline Outline Lecture 11 I Outputs II Costs Lecture 10 Notes I Outputs The short run A time frame in which the quantity of at least one factor of production is fixed some factors used by the firm are fixed in quantity i e technology buildings capital in the short run You can t just build a new factory in a week or even a month Note other factors used by the firm vary with output such as labor raw materials energy In the short run to increase output the firm must increase the quantity of variable factors it uses Fixed Factors Cannot be changed in the short run Variable Factors Production can be varied at any point The Long Run A time frame in which the quantities of all factors of production can be varied This means that the firm can change its plant size as well as the quantity of all its other factors in the long run Note long run decisions are not easily reversed II Costs Looking at production and costs in the short run Total product x which is the maximum output that a given quantity of labor can produce Marginal Product of Labor the income in total product that results from a one unit increase in the quantity of labor employed with all other inputs remaining the same MPL Change in X Change in labor Average Product of Labor APL which equals total product divided by the quantity of labor employed APL stuff labor number of workers These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Labor Total Output MPL APL 1 30 30 1 30 2 70 70 30 2 1 40 70 2 35 3 120 120 70 3 2 50 120 3 40 4 160 40 160 4 40 5 190 30 190 5 38 6 210 20 210 6 35 This will give us a graph that shows how workers initially become more productive when they are increasing but after they increase too much they can become less productive perhaps from a loss of the space they need to work efficiently Note The line for the marginal will always intersect the average line at the highest point on the average line As a business you care about this because you want peak productivity from your employees
View Full Document
Unlocking...