Varying Scale Economies Discussion

Varying Scale Economies The production function that corresponds to these isoquants exhibits varying returns to scale. Initially, the firm uses one worker and one unit of capital, point a. Point b has double the amount of labor and capital as does a. Similarly, c has double the inputs of b, and d has double the… Continue reading Varying Scale Economies Discussion

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Productivity and Technological Change

Productivity and Technological Change Differences in productivity across markets may be due to differences in the degree of competition. In competitive markets, in which many firms can enter and exit the market easily, less productive firms lose money and are driven out of business, so the firms that are actually producing are equally productive. In… Continue reading Productivity and Technological Change

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U.S. Electric Generation Efficiency

U.S. Electric Generation Efficiency Innovation In its production process, a firm tries to use the best available technological and managerial knowledge. An advance in knowledge that allows more output to be produced with the same level of inputs is called technological progress. The invention of new products is a form of technological innovation. The use… Continue reading U.S. Electric Generation Efficiency

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Tata Nano’s Technical and Organizational Innovations

Tata Nano’s Technical and Organizational Innovations     1495.5 Productivity and Technological Change The Nano has a single windshield wiper, one side-view mirror, no power steering, a simplified door-opening lever, three nuts on the wheels instead of the customary four, and a trunk that does not open from the outside—it is accessed by folding down… Continue reading Tata Nano’s Technical and Organizational Innovations

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Labor Productivity During Recessions

Labor Productivity During Recessions Managerial Solution During a recession, a manager of the American Licorice Company has to reduce output and decides to lay off workers. Will the firm’s labor productivity— average product of labor—go up and improve the firm’s situation or go down and harm it? Layoffs have the positive effect of freeing up… Continue reading Labor Productivity During Recessions

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The Opportunity Cost of an MBA

The Opportunity Cost of an MBA     1576.1 The Nature of Costs Q&A 6.1 Meredith’s firm has sent her to a conference for managers and paid her registration fee. Included in the registration fee is free admission to a class on how to price deriva- tive securities, such as options. She is considering attending,… Continue reading The Opportunity Cost of an MBA

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Calculating Marginal Cost assignment

Calculating Marginal Cost Cost Curves We illustrate the relationship between output and the various cost measures in Figure 6.1. Panel a shows the variable cost, fixed cost, and total cost curves that cor- respond to Table 6.1. The fixed cost, which does not vary with output, is a horizontal line at $48. The variable cost curve is… Continue reading Calculating Marginal Cost assignment

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