Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
25 Cards in this Set
- Front
- Back
|
Production Function |
Specifies the maximum output that can be produced with a guven quantity of inputs |
|
|
Total product |
Total amount of output produced |
|
|
Marginal product |
Extra output produced by an additional unit of input while other inputs are held constant |
|
|
Average product |
Total output divided by total input |
|
|
Law of diminishing returns |
A firm will get less and less extra output when it adds additionalunits of an input while holding other inputs fixed |
|
|
Returns to scale |
Effects of scale increases of inputs on the quantity produced |
|
|
Constant returns to scale |
A change in all inputs leads to a proportional increase in output |
|
|
Increasing returns to scale |
Aka economies of scale When an increase of all inputs leads to a more than proportional increase in the level of output |
|
|
Decreasing returns to scale |
When a balanced increase of all inputs leads to a less than proportional increase in total output |
|
|
Short run |
Period in which firms can adjust production by changing factors such as material and labor but cannot change fixed factors such as capital |
|
|
Long run |
Period sufficiently long that all factors including capital can be adjusted |
|
|
Process innovation |
Increase in output even with the same amount of input |
|
|
Product innovation |
Same improved output |
|
|
Productivity |
Concept measuring the ratio of total outputto a weighted averahe of inputs |
|
|
Labor productivity |
Amount of output per unit of labor |
|
|
Total factor productivity |
Output per unit of total inputs |
|
|
Productivity growth |
Outputs is growing faster than inputs |
|
|
Economies of scope |
Occur when a number of different products can be produced more efficiently together than apart |
|
|
Aggregate production functions |
Relate total output to the quantity of inputs |
|
|
Business firms |
Specialized organizations devited to managing the process of production |
|
|
Individual proprietorship |
The classic small business |
|
|
Partnership |
Imposed unlimited liability -partners are liable without limit for all debts contracted by the partnership |
|
|
Corporation |
Business organization owned by a number of individual stockholders |
|
|
Fixed Inputs |
Inputs that cannot be readily changed such as land and capital |
|
|
Variable Inputs |
Inputs that can be readily changes such as materials, labor, etc. |
