10-31

Question 1

Total output changes when the amount of a single variable input (labor) changes while other inputs are held constant

Answer 1

Production function

Question 2

Production period so short that only the variable inputs (labor) can be changed

Answer 2

Short run

Question 3

Production period long enough to change the amounts of all inputs

Answer 3

Long run

Question 4

Total output or production by a firm

Answer 4

Total product

Question 5

Extra output due to the addition of one more unit of input

Answer 5

Marginal product

Question 6

Three stages of production

Answer 6

1. Increasing marginal returns: product of each extra worker increases
2. Decreasing marginal returns: production keeps growing but by smaller and smaller
3. Negative marginal returns: too many workers, in each other’s way, causing output to fall