中级微观经济学——理论与应用（第10版）（经济学经典教材·双语教学用书）尼克尔森等著0324319681_67669上课用课件.ppt

Part 4 Production, Costs, and Supply Chapter 7 Production Production Functions The purpose of a firm is to turn inputs into outputs. An abstract model of production is the production function, a mathematical relationship between inputs and outputs. Production Functions Letting q represent the output of a particular good during a period, K represent capital use, L represent labor input, and M represent raw materials, the following equation represents a production function. Two-Input Production Function An important question is how firms choose their levels of output and inputs. While the choices of inputs will obviously vary with the type of firm, a simplifying assumption is often made that the firm uses two inputs, labor and capital. Marginal Product Marginal physical productivity, or the marginal product of an input: the additional output that can be produced by adding one more unit of a particular input while holding all other inputs constant. Marginal product of labor (MPL): the extra output obtained by employing one more unit of labor while holding the level of capital equipment constant. Marginal product of capital (MPK): the extra output obtained by using one more machine while holding the number of workers constant. Diminishing Marginal Product It is expected that the marginal product of an input will depend upon the level of the input used. Since, holding capital constant, production of more output is likely to eventually decline with adding more labor, it is expected that marginal product will eventually diminish as shown in Figure 7-1. FIGURE 7-1: Relationship between Output and Labor Input Holding Other Inputs Constant Diminishing Marginal Product The top panel of Figure 7-1 shows the relationship between output per week and labor input during the week as capital is held fixed. Initially, output increases rapidly as new workers are added, but eventually it diminishes as the fixed capital becomes overutilized. Marginal Product Curve The marginal product