eBooks SearchInclude Read Aloud for titles that can be read aloud.
III. Understanding Labor Productivity
Total product of labor (TPL) measures total
production occurring as more workers are added to a production process
containing fixed resources.
|Total Product of Labor (TPL)||Marginal Product of Labor (MPL)||Average
|Stage 1 Increasing marginal
returns to scale (getting bigger)
because of worker specialization.
Stage 2 Decrease marginal
Stage 3 Negative marginal returns to scale because workers are in the way of each other.
IV. Determining Production Costs Note:
Costs is change in TC
|Average Total Costs (2+3)/1|
V. Graphing Production Costs
VI. Productivity affects costs
|Note that AV is the mirror
image of AP and MC is the mirror image of MP.
At low quantities MC is below AVC so AVC is falling. As MC starts to rise AVC flattens but continues to decrease because MC isstill lower. When MC rises above AVC, AVC immediately begins to rise indicating the intersection must be AVC's lowest point.
The Economist Magazine 5/4/13
improve grades and Careers.
VII. Total variable costs are not a straight line but an
VIII. Economies and diseconomies of scale
|Start-up costs cause the
curve to rise quickly at low levels of production. Examples
include Incorporating, legal and accounting, Licenses and permits,
Remodeling, Rent, Security Deposit or Real Estate Purchase, Signage and
marketing materials, Initial inventory Supplies, Furniture and Equipment.
Diseconomies of scale cause production to be
inefficient and result in the curve rising sharply as maximum capacity is
approached. Examples include
Bureaucracy and diminishing returns. Japanese
flexible production techniques enhance economies of scale and stretched
out the low point on the AVC line. These techniques have been adopted by
manufacturers around the world.
Economies of scale for all manufacturing.
This data and cheap labor is wy job recovery from the Great Recession has been so slow.
X. Our Economics Learning Center is for students, teachers, and professionals.
A Game Changer for U.S. Manufactyuring
Chapter 21 Class