Cards (76)

    • A production function illustrates the relationship between the quantity of inputs a firm uses and the maximum quantity of output it can produce.
    • Steps to define a production function
      1️⃣ Identify inputs
      2️⃣ Identify outputs
      3️⃣ Express the relationship mathematically
    • Inputs in a production function include labor, capital, and raw materials
    • What happens to fixed inputs when production increases?
      They remain constant
    • Variable inputs decrease when output decreases.
    • What is an example of a fixed input in a bakery?
      Oven size
    • Variable inputs change with the level of production
    • Fixed inputs do not change with output levels.
    • Inputs in a production function include labor, capital, and raw materials.
    • Inputs in a production function are resources like labor, capital, and raw materials.
    • Outputs in a production function are finished goods or services.
    • Fixed inputs do not change with the level of production.
    • Match the type of input with its definition:
      Fixed Inputs ↔️ Resources that do not change with output
      Variable Inputs ↔️ Resources that change with output
    • The short-run production function assumes at least one input is fixed.
    • The short-run production function illustrates the relationship between labor and capital when capital is fixed.
    • What are fixed inputs in production theory?
      Resources that do not change
    • Fixed inputs remain constant regardless of production levels
    • Give an example of a fixed input in a bakery.
      Oven size
    • Variable inputs change with output levels.
    • Match the input type with its definition:
      Fixed Inputs ↔️ Resources that do not change with output
      Variable Inputs ↔️ Resources that change with output
    • What is the formula for Average Product (AP)?
      AP=AP =TPInput \frac{TP}{Input}
    • Marginal Product (MP) is the additional output gained from adding one more unit of input
    • The law of diminishing returns states that output increases indefinitely with more variable inputs.
      False
    • Explain the law of diminishing returns using a farming example.
      Adding more farmers reduces marginal yield
    • In a bakery example, what is a fixed input?
      The size of the oven
    • Fixed inputs remain constant even when output decreases
    • What are three examples of variable inputs?
      Labor, raw materials, energy
    • Steps for understanding the short-run production function
      1️⃣ Define fixed inputs
      2️⃣ Define variable inputs
      3️⃣ Identify labor and capital
      4️⃣ Analyze the relationship between labor and capital
    • Fixed inputs do not change with output levels in the short-run production function.
    • In the short-run production function Q=Q =f(L,K) f(L, K), capital is assumed to be fixed
    • What does the variable QQ represent in the short-run production function?

      Quantity of bread
    • Average product (AP) measures output per unit of input.
    • What is the formula for marginal product (MP)?
      MP=MP =ΔTPΔInput \frac{\Delta TP}{\Delta Input}
    • Match the production metric with its definition:
      Total Product (TP) ↔️ Total quantity of output
      Average Product (AP) ↔️ Output per unit of input
      Marginal Product (MP) ↔️ Additional output from one more input unit
    • The law of diminishing returns states that the marginal product of variable inputs eventually decreases
    • The law of diminishing returns applies when at least one input is fixed.
    • What happens to the marginal product of labor as more bakers are added to a fixed-size oven?
      It decreases
    • Average product (AP) is calculated as \frac{TP}{Input}</latex>
    • If 5 bakers produce 100 loaves, the average product is 20 loaves per baker.
    • The marginal product of input is calculated using the formula MP=MP =ΔTPΔInput \frac{\Delta TP}{\Delta Input}