When a firm operating with two inputs, labor and capital, succeeds in increasing the total product by increasing the units of labor employed, the marginal product of is positive units of capital employed must also be increasing the firm is experiencing economies of marginal product of capital is zero. If the marginal product of the fourth worker is more than the marginal product of the worker, the firm is experiencing increasing marginal returns diminishing marginal returns supernormal profits a technological improvement A technological improvement shifts the marginal and product curve outward can reverse the effects of falling marginal productivity changes the production function all of the above Average fixed costs behave like marginal costs behave like variable costs behave like average variable costs decline as output increases Average variable costs rise whenever marginal exceed fixed costs marginal costs exceed average variable costs marginal costs exceed average total costs marginal costs are rising. The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points at maximum points at the point where average total cost and average variable cost are identical at the point where the average fixed cost is at its minimum When a firm experiences economies of scale the LRATC slopes downward the LRATC is vertical the LRATC slopes upward the LRATC is horizontal All of the following shift cost curves for except technology
When a firm operating with two inputs, labor and capital, succeeds in increasing the total product by increasing the units of labor employed, the marginal product of is positive units of capital employed must also be increasing the firm is experiencing economies of marginal product of capital is zero. If the marginal product of the fourth worker is more than the marginal product of the worker, the firm is experiencing increasing marginal returns diminishing marginal returns supernormal profits a technological improvement A technological improvement shifts the marginal and product curve outward can reverse the effects of falling marginal productivity changes the production function all of the above Average fixed costs behave like marginal costs behave like variable costs behave like average variable costs decline as output increases Average variable costs rise whenever marginal exceed fixed costs marginal costs exceed average variable costs marginal costs exceed average total costs marginal costs are rising. The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points at maximum points at the point where average total cost and average variable cost are identical at the point where the average fixed cost is at its minimum When a firm experiences economies of scale the LRATC slopes downward the LRATC is vertical the LRATC slopes upward the LRATC is horizontal All of the following shift cost curves except for technology
Ch04_SGr.docx