Combine PDF Online
Focus on Costs of Production and Perfect Competition.
Page 2: Unit Reflection
Reflection on learning and grades:
Does your grade reflect your learning? Why/why not?
Positive aspects:
What is working well? What can Ms. Wong do to help?
Negative aspects:
What is not working? What needs to change?
Goal setting:
Identify three goals for the next unit.
Page 3: Production Definition
Production: The process of converting inputs into outputs.
Page 4: Inputs and Outputs Relationship
Exploration of different examples illustrating the relationship between inputs (resources) and outputs (products).
Page 5: Widget Production Simulation
Simulation exercise to demonstrate production processes.
Page 6: Production Simulation Overview
Class divided into 2 firms producing chains from paper.
Simulation details:
Rounds: Several 2-minute rounds.
Hiring: Each firm hires additional workers in each round.
Resources: 1 stapler, scissors, table, and ample paper and staples.
Rules: Workers cannot stockpile papers or cut more than one at a time.
Responsibilities: Managers hire workers; inspectors check outputs.
Page 7: Production Simulation Steps
Cut paper down the middle into two pieces.
Fold each piece down the middle.
Wrap ends around and staple.
Add more links to one end.
Page 8: Inputs and Outputs in Profit Earnings
Firms must produce output/products to earn profit.
Definitions:
Inputs: Resources used in production, also called factors.
Marginal Product (MP): Change in total product due to additional input.
Total Physical Product (TP): Total output produced.
Average Product (AP): Output per unit of input, calculated as AP = Total Product / Units of Labor.
Page 9: Production Analysis
Inquiry into how total product changes with the hiring of more workers:
Effect on marginal product as more workers are hired.
Explore: Law of Diminishing Marginal Returns - Additional output from each new worker will eventually decline, i.e., too many cooks in the kitchen.
Page 10: Graphing Production
Visual graphing of production data and return characteristics.
Page 11: Three Stages of Returns
Stage I: Increasing marginal returns.
MP is rising; TP increases at an increasing rate due to specialization.
Stage II: Decreasing marginal returns.
MP is falling; TP increases at a decreasing rate because of fixed resources.
Stage III: Negative marginal returns.
MP is negative; TP begins to decrease as workers interfere with each other.
Page 12: Further Details of Stages
Returns: Grasping each stage is key in productively using labor and resources.
Graphical representation of stages and their implications.
Page 13: Law of Diminishing Marginal Returns
Not due to laziness, but fixed resources' limitations.
Page 14: Efficiency Calculations
With partners, calculate MP and AP; graph TP, MP, and AP.
Page 15-19: Tallying Output with Workers
Overview of units produced relative to worker input, demonstrating MP and AP calculations.
Page 20: Real-World Examples of Production
Example 1: Study hours diminishing returns as additional studying leads to fatigue.
Example 2: Farmer's marginal returns reduce despite increased weeding efforts.
Page 21: Costs of Production Overview
Introduction to different types of costs in production.
Page 22: Accountants vs Economists
Accounting Profit: Total Revenue - Accounting Costs (Explicit Only).
Economic Profit: Total Revenue - Economic Costs (Explicit + Implicit); including opportunity costs.
Page 23: Economic Costs
All costs considered as economic costs going forward.
Page 24: Short-Run Production Costs
Definition of short-run: period where at least one resource is fixed.
Long-Run: all resources are variable, allowing adjustments in production size.
Page 25-28: Cost Definitions and Calculations
Total Costs (TC): Combination of fixed (FC) and variable costs (VC).
Average Costs: AFC, AVC, ATC calculated per unit.
Marginal Cost (MC): Additional cost incurred for producing one more unit of output.
Page 29-36: Calculating and Analyzing Costs
TP, VC, FC, TC calculations through provided data.
Page 37-42: Cost Graphs and Analysis
Graphical representation of costs associated with output levels.
Page 43-46: Understanding U-Shaped MC Curve
Explanation of why the MC curve is U-shaped.
Page 47-50: Exploring Long-Run Average Total Costs
Changes in production scale and the implications for cost efficiency.
Page 51: Shifting Cost Curves
Understanding how changes in fixed and variable costs affect production analysis.
Page 52-59: Investigating Variations in Costs
Examples of shifting costs and their relation to variable resources.
Page 60-64: Practical Impact of Changing Costs
Visual diagrams illustrating shifts in costs due to economic factors.
Page 65-72: Cost Analysis Recap
Recap of cost definitions, shifting curves and variables in the context of production efficiency.
Page 73: Long-Run Costs Analysis
Overview of all resources being variable and their implications.
Page 74-84: Economies and Diseconomies of Scale
Economies of Scale: Increased output lowers the per-unit cost.
Diseconomies of Scale: Increased size leads to higher per-unit costs due to inefficiencies.
Page 85-162: Market Structures and Perfect Competition
In-depth look at the characteristics of different market structures, with a focus on Perfect Competition.
Discusses how firms respond to prices, establish supply curves, and maximize profits.
Important Concepts to Study:
Difference between fixed and variable resources.
Law of diminishing marginal returns with examples.
Stages of returns in production.
Profit maximization and calculating various costs (AVC, AFC, ATC, MC).
Difference between short-run and long-run perspectives on production.
Applications in perfect competition market structure.