Diminishing Returns
Diminishing Returns
Least-Cost
Vocab
Vocab/Equations
100
What is the MI at 50 pounds of fertilizer?
50
100
What is the AP at 0 pounds of Fertilizer?
0
100
How many pounds of protein are added between ration C and ration D?
200
100
What are inputs
Materials that determine fixed and variable costs
100
Stage 1 is
Increasing average return for each added input
200
How much fertilizer should Joe Blow apply to his corn
150
200
What is the MP at 250 pounds of fertilizer?
-4
200
How many pounds of corn are replaced from ration B to ration C
440 pounds
200
What are outputs
Results caused by the amount of inputs used in production
200
Stage 2 is
Begins when MP equals AP
300
What is the MP at 100 pounds of fertilizer?
7 bushels
300
What is the VMP at 100 pounds of fertilizer
$31.50
300
What is the marginal rate of substitution for ration D?
1.5
300
What is the principle of diminishing returns
As an input is added in production the output will increase at an increasing rate then at decreasing rate and finally decline
300
Stage 3 is
Begins when MP becomes 0
400
What is the AP at 150 pounds of fertilizer?
1.74
400
What is the AP at 50 pounds of fertilizer
1.5
400
What is the price ratio for ration B?
$2.14
400
What are the 3 ways that production is measured
TP, AP, MP
400
What is the Marginal rate of substitution equation?
change in input / change in input
500
What is the MC at 200 pounds of fertilizer? Fertilizer costs $.40 per pound and Corn is worth $4.50 per bushel
$20
500
At what level of inputs does the stage 3 production function begin?
d
500
What is the Least Cost ration?
C 1500
500
What is opportunity cost
The cost of using a resource in one way based on the return that could be obtained from using it another way
500
What is the least cost equation
pounds of corn x cost of corn + pounds of protein x cost of protein