FreeEconHelp.com, Learning Economics... Solved!: production
Showing posts with label production. Show all posts
Showing posts with label production. Show all posts

8/8/12

Common mistakes students make when learning production theory

14:53
Common mistakes students make when learning production theory
This economics post goes over some of the most common mistakes that I have seen students make when turning in homework and completing exams for the production theory portion of introductory microeconomics.  Remember that this concept is what students will need to understand stand in order to perform well in all of the production theory chapters including perfect competition, monopolistic competition, oligopolies and monopolies.  Understanding the theory behind production and the associated relationships between all of the cost curves is very important and will lead to an easier time performing well in the later chapters. 

4/18/12

Finding labor that maximizes average product of labor

02:44
Finding labor that maximizes average product of labor


Working with production functions can be tricky.  This post goes over the economics of average and marginal products of labor (or any input for that matter) working with a production function.  To do this we are going to use the following example:

Let Q = 1200L^2 –L^4 where L is an input (for example, labor) and Q is the associated output.

4/7/12

What does decreasing marginal product mean?

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What does decreasing marginal product mean?

This post goes over the economic intuition of marginal, average, and total product.  In economics, factors of production (inputs such as labor/capital) are used to produce goods and services.  Economists measure the productivity of a variable input by the amount it can produce and generally call it “product”.  The “total product” is the total amount of output produced with a given amount of inputs, the “average product” is the average amount of output produced per unit of input, and the “marginal product” is the amount of output that the next (or last) input will (or has) produced.  Note that the concepts of marginal, average and total products are short run phenomena and long run relationships will be different.

3/5/12

Production efficiency and opportunity cost of the American Clean Energy and Security Act of 2009

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Production efficiency and opportunity cost of the American Clean Energy and Security Act of 2009

This economics post discusses a common question going around the web.  I am not aware of any "right" answer, so feel free to comment and contribute below:

“If the American Clean Energy and Security Act of 2009 becomes law, it will limit greenhouse gas emissions from electricity generation and require electricity producers to generate a minimum percentage of power using renewable fuels. Some of the rights to emit will be auctioned. The Congressional Budget Office estimates that the government will receive $846 billion from auctions and will spend $821 billion on incentive programs and compensation for higher energy prices. Electricity producers are projected to spend $208 million a year to comply with the new rules.”

Will this new law achieve production efficiency?

2/21/12

What are oligopolies and oligopolistic markets? An introduction with examples

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What are oligopolies and oligopolistic markets?  An introduction with examples

An Oligopoly is a type of market where there are a relatively small number of firms.  The important thing to remember about an oligopolistic market is that each firm’s decision impacts another firm’s decision, so they are related or dependent on each other.  For example, if one airline were to lower their ticket prices, all other airlines would lower their ticket prices as well to stay competitive; this dependence on rival firms is unique to the oligopoly market.

Imagine if you are in a perfectly competitive firm, you are a price taker, so the decisions of other firms do not impact you.  If you are in a monopolistically competitive market you advertise, research, brand, change the quality of your product to make an economic profit, you do not interact directly with competitors.  Finally, in a monopoly market you have no competition so rival firms do not impact your decisions.

2/7/12

Per capita production functions, math and graphs

10:34
Per capita production functions, math and graphs

Most of the time in economics’ classes you are given the production function and asked to convert it into a per capita production function for further manipulation.  This article is going to go over the economics of production functions and per capita production functions with 5 different examples including graphs showing what the functions look like.  Check out this other post for information on the math behind getting a production function to a per capita or per person production function, using a generic form and some other specific examples. 

Here is the actual question being looked at:

10/29/11

The per capita production function and the determinants of labor productivity

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The per capita production function and the determinants of labor productivity
The determinants of economic growth and labor productivity:
Two components factor into economic growth and labor productivity: capital and technology.  Capital refers to the amount of physical capital in the economy such as machines, robots, factories, and any other tool that helps workers make things.  Technology can refer to the following:

Better machinery and equipment:  such as faster computers, or more efficient energy generators.

Better management and organization: the assembly line is famous for a better way to organize production, or shipping methods developed that reduce storage costs.