Tutorial 2 Flashcards
1
Q
production function
A
the relationship between quantity of inputs used to make a good and the quantity of output of that good
2
Q
marginal product
A
the increase in outphut that arises from an additional unit of input.
3
Q
diminishing marginal product
A
the property whereby the marginal product of an input declines as the quantity of the input increases.
4
Q
marginal cost
A
the increase in total cost that arises from an extra unit of production.
5
Q
economies of scale
A
the property whereby long-run average total cost falls as the quantity of output increases.
