Exam 2 Study Guide (8 pages)

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Exam 2 Study Guide



Previewing pages 1, 2, 3 of actual document.

View the full content.
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View Full Document

Exam 2 Study Guide

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This study guide gives you a basis of what you need to know from the lectures in class. I recommend also reading the textbook and getting the definitions for the define and explain the significance questions from there. Best of luck!


Pages:
8
Type:
Study Guide
School:
The University of Oklahoma
Course:
Econ 1123 - Princ. of Econ-Micro
Edition:
1

Unformatted text preview:

Econ 1123 1st Edition Exam 2 Study Guide Lectures 10 17 Lecture 10 February 23 Concepts covered I II 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 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 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 Note No table like this will be tested because Clark would rather us understand concepts than do arithmetic this is



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