Production Functions in Microeconomics

The maximum output achievable from a given level of input

The total output produced by employing all units of input

The additional output that can be produced by employing one more unit of input while holding other inputs constant (correct)

The change in total production when all inputs are varied simultaneously

MPL remains constant regardless of the units of labor added

$MPL < 0$ ... By adding the next unit of labor, the increase in total production is negative (correct)

$MPL_1 < MPL_2$ ... By adding the next unit of labor, the increase in total production is higher than before

$MPL_1 > MPL_2$ ... By adding the next unit of labor, the increase in total production is lower than before (but TP is still increasing)

The average product of capital increases

The productivity of the variable input decreases as more of it is used (correct)

The production function is linear

The marginal cost of production decreases

<p>By adding the next unit of labor, the increase in total production is higher than before</p> Signup and view all the answers

<p>By adding the next unit of labor, the increase in total production becomes negative</p> Signup and view all the answers