Table 6.1 Total Product, Marginal Product, and Average ...

[Pages:11]Table 6.1 Total Product, Marginal Product, and Average Product of Labor with Fixed Capital

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6-10

Output, q, Units per day

Figure 6.1

(a)

Production

110

Relationships

90

with Variable

56

Labor

Diminishing Marginal Returns

0

(b)

sets in!

20!

APL

,

MPL

15

0

C

B

A

4

6!

a!

11!

L, Workers per day

b!

Average product, APL

Marginal product, MPL

4

6!

c! 11!

L, Workers per day

Table 6.2 Output Produced with Two Variable Inputs

? 2009 Pearson Addison-Wesley. All rights reserved.

6-17

Figure 6.2 Family of Isoquants

6

a

K,

Units of capital per d

a

y

3

b

2

e

c

1

0

1

2

3

? 2009 Pearson Addison-Wesley. All rights reserved.

f

q

= 35

d

q

= 24

q

= 14

6

L,

W o

r

k

e

rs per da

y

6-18

Figure 6.3a,b Substitutability of Inputs

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6-20

Figure 6.3c Substitutability of Inputs

? 2009 Pearson Addison-Wesley. All rights reserved.

6-21

Figure 6.4 How the Marginal Rate of Technical Substitution Varies Along an Isoquant

MR

T

S

in a Pr

i

n ting and Pu

b l

i shing

U.

S

.

F ir

m

K,

Units of capital per d

a

y

16

a

%K

= ?6

10

7

45

b

%L

= 1?3

1

c

?2

1

d

?1

1

e

q

= 10

0

1

2

3

4

5

6

7

8

9

10

L,

W o

r

k

e

rs per da

y

? 2009 Pearson Addison-Wesley. All rights reserved.

6-24

Application:Returns to Scale in U.S. Manufacturing

? 2009 Pearson Addison-Wesley. All rights reserved.

6-32

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