SAS 12 Flashcards
The total output produced per unit of a resource employed
Average product
The additional output produced when 1 additional unit of a resource is employed
Marginal product
The total output of a particular good or service
Total product
States that if additional units of one resource are added to another resource in fixed supply, eventually the additional output will decrease
The law of diminishing marginal returns
Combination of inputs to produce the same level of output
Isoquant
Prescribed by the profit incentives
The willingness to produce
Refers to the consumer’s budget line
Isocost line
Changes in accordance with tue volume of production
Variable inputs
Prescribes by resources availability
Ability to produce
Technical name given to a relationship between quantities of various inputs
Production function
Remains constant regardless of the volume of production
Fixed input
Transformation of inputs into outputs
Production
A period of production where all inputs become variables
Long run period
The point of tangency of the isoquant and isocost curves
Profit maximization
The amount of one factor in that can be replaced by one factor
Marginal rate of substitution
