Economics Flashcards

Front

What are the costs of production?

Back

The money spent on inputs (resources like labor, machinery) to produce outputs.

Front

What is Labor in the context of production?

Back

The focus of this lesson — how many workers to hire.

Front

Define Marginal Product (MP).

Back

The additional output produced by hiring one more worker.

Front

What are the types of returns in production?

Back

Increasing Returns, Diminishing Returns, Negative Returns.

Front

What happens during Increasing Returns?

Back

Total Product (TP) and Marginal Product (MP) both increase.

Front

What happens during Diminishing Returns?

Back

Total Product (TP) increases, but Marginal Product (MP) decreases.

Front

What happens during Negative Returns?

Back

Total Product (TP) and Marginal Product (MP) both decrease.

Front

Calculate the Marginal Product when Janine hires a 4th worker. If 3 workers produce 12 jeans and 4 workers produce 18 jeans, what is the MP?

Back

6 jeans.

Front

If hiring a 5th worker increases total output from 18 to 22 jeans, what is the MP?

Back

4 jeans.

Front

What are Fixed Costs (FC)?

Back

Costs that do not change with output (e.g., rent).