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Average product and marginal product:
Average product (AP) is the output per unit of the variable factor employed. In other words, it is the productivity of the variable factor (VF). It is measured by dividing total product (TP) by amount of variable factor employed. i.e
Average product is measured in respect of a variable factor. Where the variable factor is say labour (L), then it is the average product of labour (APL) or the productivity of labour that we can measure as:
Where the variable factor is capital (K), then can measure the average product of capital (APK) or the productivity of capital as:
Marginal product is the change in total product resulting from the use of one more (or less) unit of a variable factor. It may also be explained as the rate of change in total product with respect to a variable factor (ΔVF), i.e.
where ? = change. Marginal product is also calculated in respect of variablefactor. The MP of labour (MPL) as:
The price of oil increases because OPEC reduces oil production
Example of a cost function
In fall 2006, Pace University raised its annual tuition from $24,750 to $29,750. Freshman enrollment declined from 1500 in fall 2005 to 1110 in 2006. assuming the demand curve did
Allocation Function The shifting or reallocation of production property into or out of markets based on shifts in prices for the products or services produced in that market.
Supply and demand for a given type of MP3 player are given by the following equations: P=980-1.5Qd P=20+0.9Qs
What is pigovian welfare economics
Explain crowding out and why it may be considered important for policy makers. Crowding out refers to how enhanced government borrowing (real borrowing!) might serve to raise i
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buyers cannot tell whether any given car is a lemon. The percent of all cars that are lemons is theta. How much is theta when all cars offered are sold?
Ask question #Minimum 100 words accepteFill out this National Council on Economic Education worksheet: Technology and Monopolies (Links to an external site.) Now, pretend that you
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