10/23 notes

Question 1

Q for theory of the firm =

Answer 1

firm inputs
Q=F(K(capital), L (Labor))

Question 2

fixed inputs variable

Answer 2

K

Question 3

variable inputs variable

Answer 3

L

Question 4

total production of labor =

Answer 4

L

Question 5

average production labor =

Answer 5

Q/L

Question 6

marginal production of labor =

Answer 6

change in Q divided by change in L

Question 7

diminishing marginal productivity of labor

Answer 7

there comes a point when an additional factor of production results in a lessening of output or impact

Question 8

marginal product of labor

Answer 8

companys increase in total production when one additional unit of labor is added (in most cases add one mployee) and all other factors of production remain constant

Question 9

short run total cost=

Answer 9

FC (fixed cost) + VC (variable cost)

Question 10

total cost =

Answer 10

VC

Question 11

scale means

Answer 11

size

Question 12

constant returns to scale

Answer 12

occurs when the long run average between a companys inputs and outputs are proportional to each other

Question 13

increasing returns to scale means

Answer 13

when the output is greater than the increase in input

Question 14

according to the law of diminishing marginal utility as consumption of a particular good increases

Answer 14

marginal utility decreases

Question 15

what do most ppl think long run is like

Answer 15

constant returns to scale

Question 16

what does the income effect cause

Answer 16

QD to increase when the price of a normal good decreases and causes QD to decrease when price of inferior good decreases

Question 17

what happens when network externalities are present

Answer 17

usefulness of a product increases with the number of consumers who use it

Question 18

what happens when consumption of a product is path dependent

Answer 18

the cost if switching to a product with better tech gives the product with initial tech an advantage