MIDTERM #3 STUDY GUIDE
MIDTERM #3 STUDY GUIDE ECON 1010
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This 0 page Study Guide was uploaded by Natalie Notetaker on Sunday November 15, 2015. The Study Guide belongs to ECON 1010 at Tulane University taught by Toni Weiss in Summer 2015. Since its upload, it has received 359 views. For similar materials see Intro to Microeconomics in Economcs at Tulane University.
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Date Created: 11/15/15
102015 Draw an appropriate demand curve from the indifference map below of Ytime Income 100 V o Rtime Price incomequantity Production Short run the period of time in which the amount of at least one factor of production is xed and there is not enough time to enter or exit an industry Long run the amount of times such that the amounts of all factors of production can be varied and there is enough time to enter or exit an industry Fixed factors of production variabe factors of production 102715 How much can be produced with various amounts of labor 0 Total product tp total amount produced Marginal product mp how much each additional worker can produce Mp ATP AL 0 Average product ap how much on average each worker can produce AP TPL Assumptions only variable resource is labor all labor is identical labor market is perfectly competitive all labor being used ef ciently gtUUl 39 The law of diminishing marginal product returns the more a variable resource is added to xed resources the productivity of the variable resource decreases RELATIONSHIPSII 1 Marginal product and total output MP gt O l TP MP lt O l TP MP gt 0 and I l TP at an increasing rate MP gt 0 and l l TP at a decreasing rate 2 Marginal product and average product MP gt AP n AP MP lt AP n AP QtimeA Qtime Maximum of AP TP AP MP L V L I Read graphs from bottom 3MP and AP What is my quantity at various Intersect at max amounts of labor At the of AP blank worker my tam product V is 102915 Changing camera angle from quotHow much can be produced by various amounts of laborquot to quotHow much does it cost to produce various amounts of outputquot Total costs of production Total costs of production Implicit costs explicit costs xed costs variable costs Explicit costs Implicit costs opportunity costs Things you buy 1 Salary not earned Toni s working as a teacher instead of putting more time into consultinh but she wouldnt be as happy so the money would be spent on threrapy lol 2 Interest not earned 3 Rent not earned you own a property You can either have a business in that space or rent the space If you have business you are giving up that rent check Accounting pro t total revenue total explicit costs Economic pro t total revenue explicit costs implicit costs Normal pro t zero economic pro t Fixed costs Costs that do not vary with output no matter how much you make Even zero Variable costs costs that do vary with output Labor variable costs labor costs Qtime 30 k F 1 kgt TP TFC L 1 UOK mk Qtlm Qtime MC v D V k Qtime 100k MP total xed cost TFC marginal cost how much does it cost to produce one more unit of output MC ATCATP ATCAQ TC TVC TFC TFC TC TVC Why marginal product decreases while marginal cost increases HOMEWORK Those 4 graphs diminishing marginal returns begins immediately marginal cost immediately decreasing 111015 AFC ATC AVC TC ATC X Q MC ATVC AQ AVC TVC Q Pro t total revenue total cost Industry collection rms selling similar products Perfect competition lMonopolistic lOligopoly lMonopoly Market Firm Price Su pw Price Demand E11 Quantity market u Quantity rm market industry rm price taker above p5 quotSlope 5 which is the price Slope of total revenue curve price of product Make decisions based on quotmarginalsquot marginal revenue the extra revenue earned when selling one more unit MR ATR AQ 5 DMR gt Qtime
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