ECON 202 1st Edition Lecture 13 Outline of Last Lecture II More on Utility and Module 20 III Exam 2 Review Outline of Current Lecture IV Firms and Production Current Lecture Firms and Production Firms any organization that produces a good or service Production Function Explain relations between inputs and outputs Looks identical to the utility function Fixed Inputs and Variable Inputs Fixed Inputs in the short run it cannot be changed Variable Inputs you can change also in the short run Short Run at least one input is fixed Long Run all inputs are variables Example Farming Wheat 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 We expect these two curves to look like this Suppose you get more land TP1 will rotate up to TP2 MP1 will shift out to MP2 Next Module Firm Costs Fixed does not depend on quantity Cost of fixed input Variable do depend on quantity Output Quantity Fixed Costs Variable Costs Total Costs Marginal Cost 0 120 00 0 120 00 0 1 120 00 10 130 00 10 2 120 00 23 143 00 13 3 120 00 55 175 00 32 4 120 00 90 210 00 35 Marginal Cost Change in Total Cost Change in Quantity
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