managerial economics 11th edition - 成都信息工程学院 管理经济学第十一版-成都信息工程学院

Chapter 5 Production analysis and policy,KEY CONCEPTS,production functiondiscrete production functioncontinuous production functionreturns to scalereturns to a factortotal productmarginal productaverage productlaw of diminishing returnsisoquanttechnical efficiencyinput substitution,marginal rate of technical ridge linesmarginal revenue producteconomic efficiencymarginal revenueisocost curve (or budget line)constant returns to scaleexpansion path increasing returns to scaledecreasing returns to scaleoutput elasticitypower production functionproductivity growthlabor productivitymultifactor productivity,OVERVIEW,Production FunctionsTotal, Marginal, and Average ProductLaw of Diminishing Returns to a FactorInput Combination ChoiceMarginal Revenue Product and Optimal EmploymentOptimal Combination of Multiple InputsOptimal Levels of Multiple InputsReturns to ScaleProduction Function EstimationProductivity Measurement,一.Production Functions,1.Properties of Production Functions2.Discrete production functions and Continuous production functions,二. Returns to Scale and Returns to a Factor,Returns to scale: all inputs output effect Returns to a factor: one input output effect,三.Total, Marginal, and Average Product,1.Total ProductTotal product is total output.,2. Marginal product: the change in output caused by increasing input use. MPX=Q/X *If MPX 0, TP If MPX 0, TP3. Average product APX=Q/X.,四. Law of Diminishing Returns to a Factor,1. Definition: MPX tends to diminish as X use grows.2.Illustration,If MPX , then ? MPX 1 implies increasing returns.Q = 1 implies constant returns.Q 1 implies decreasing returns.Returns to Scale Estimation,八. Production Function Estimation,Cubic Production FunctionsDisplay variable returns to scale.First increasing, then decreasing returns are common.Power Production FunctionsAllow marginal productivity of each input to vary with employment of all inputs.,九. Productivity Measurement,How Is Productivity Measured?Productivity measurement is the responsibility of the Bureau of Labor Statistics (since 1800s).Productivity growth is the rate of change in output per unit of input.Labor productivity is the change in output