More Related Content More from Stephen Kinsella More from Stephen Kinsella (20) EC4004 2008 Lecture 9 Production15. q :output of a particular good during a period,
K: capital used
L: labour input
M: raw materials
18. Relationship between Output and Labour Inputs
Holding Other Inputs Constant
Output Total
per week Output
(a) Total output L* Labor input
MPL per week
L*
(b) Marginal product Labor input per week
28. A
Capital
per week
4
q = 40
3
q = 30
2
q = 20
1
q = 10
0 1 2 3 4 Labor
per week
(a) Constant Returns to Scale
30. A Capital A
Capital
per week per week
4 4
q = 40
3 3 q = 30
q = 30
2 2
q = 20 q = 20
1 1
q = 10 q = 10
Labor Labor
0 1 2 3 4 per week 0 1 2 3 4 per week
(a) Constant Returns to Scale (b) Decreasing Returns to Scale
35. Next Time
Costs
Do 7.1, 7.2, 7.7
Read Chapter 8