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)
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1
Q

What is the total product (TP) curve?

A

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

2
Q

What is marginal product (MP) of labor?

A

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

3
Q

On the total product curve as labor changes then?

A

Total output changes

4
Q

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

A

Tachnology and all inputs except labor are held constant

5
Q

What axis is labor on in the total product curve?

A

The x-axis; horizontal axis

6
Q

What shape is the total product curve?

A

The total product curve is S-shaped

7
Q

What part of the curve is convex?

A

At the lower end where labor and output are low

8
Q

What is the phenonmenon that is a function of teamwork and specialization?

A

As more workers are added at low production levels, they can specialize in tasks and more efficiently use the fixed inputs

9
Q

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

A

It is convex

10
Q

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

A

It is concave

11
Q

What happens when the total product curve reaches its maximum point?

A

The total product curve hits its maximum point after which output decreases with each additional worker

12
Q

What is the formula for the marginal product of labor?

A

The change of total ouput that results from increasing the amount of variable input, labor, by 1 unit

13
Q

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

A

It leads to increased productivity

14
Q

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

A

Labor becomes inefficient and output falls

15
Q

What happens in the concave portion of the TP curve?

A

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