chapter_6production(微单观经济学-华侨大学,jeffcaldwe.ppt

chapter_6Production(微观经济学-华侨大学,JeffCaldwe;Topics to be Discussed;Introduction;The Technology of Production;The Technology of Production;The Technology of Production;Isoquants;Isoquants;Isoquants;Production Function for Food;Production with Two Variable Inputs (L,K);Isoquants;Isoquants;Isoquants; Amount Amount Total Average Marginal of Labor (L) of Capital (K) Output (Q) Product Product;Observations: 1) With additional workers, output (Q) increases, reaches a maximum, and then decreases.;Observations: 2) The average product of labor (AP), or output per worker, increases and then decreases.;Observations: 3) The marginal product of labor (MP), or output of the additional worker, increases rapidly initially and then decreases and becomes negative..;Total Product;Average Product;Observations: When MP = 0, TP is at its maximum When MP AP, AP is increasing When MP AP, AP is decreasing When MP = AP, AP is at its maximum;Production withOne Variable Input (Labor);As the use of an input increases in equal increments, a point will be reached at which the resulting additions to output decreases (i.e. MP declines).;When the labor input is small, MP increases due to specialization. When the labor input is large, MP decreases due to inefficiencies.;Can be used for long-run decisions to evaluate the trade-offs of different plant configurations Assumes the quality of the variable input is constant;Explains a declining MP, not necessarily a negative one Assumes a constant technology ;The Effect ofTechnological Improvement;Malthus predicted mass hunger and starvation as diminishing returns limited agricultural output and the population continued to grow. Why did Malthus’ prediction fail?;Index of World FoodConsumption Per Capita;Malthus and the Food Crisis;Malthus and the Food Crisis;Malthus and the Food Crisis;Labor Productivity ;Labor Productivity and the Standard of Living Consumption can increase only if productivity increases. Determinants of Productivity