Micro #3

The process of turning inputs
into outputs.
The cost structure of a firm depends on the
nature of the ____________ process

• production

• cost

• sunk

• reverse

the relationship
between the quantity of inputs a firm uses
and the quantity of output it produces

• variable input

• production function

• fixed input

an input whose quantity is
fixed for a period and cannot be varied

• variable input

• production function

• fixed input

an input whose quantity
the firm can vary at any time

(a)  

The (a)   run is the period in which all inputs
can be varied

The (a)   run is the period in which at least one
input is fixed

The (a)   curve shows how the
quantity of output depends on the quantity of
the variable input for a given quantity of the
fixed input

the change in output
resulting from a one-unit increase in the amount of
labor input (ΔQ/ΔL)

initially rises as more workers are
hired; then it declines

• Marginal product (of labor)

• the long run

• the short run

• production function

The (a)   of an input is the additional
quantity of output that is produced by using one
more unit of that input.
formula is ΔQ/ΔL

change in quantity of output generated by
one additional unit of labor

(a)