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Intermediate Microeconomics


4. Production


Firms use a process to transform inputs into outputs. The Pencasts in this series focus on this process. In general, firms use three inputs to make their output(s): labor, capital and raw materials. Because some inputs are difficult to change over a relatively short period of time, we separate our coverage of production into short- and long-run analyses. The substitutabiliy of inputs, innovation, technical change, and returns to scale are also covered.


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Goals of Firms

This Screencast covers the typical assumptions made regarding firm behavior. [Play ScreenCast]


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Basics of Production

This Screencast discusses the inputs used to produce outputs, including capital, labor and materials. [Play ScreenCast]


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Production Functions

This Screencast discusses a general production function and the concept of technological efficiency. [Play ScreenCast]


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Time and the Variability of Inputs

This Screencast discusses fixed and variable inputs and how time plays an important role in determining the ability of a firm to choose particular inputs to be used in the production process. [Play ScreenCast]


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Short-Run Production

This Pencast covers short-run production, assuming that capital is fixed and labor is variable (a common assumption). It also shows how to derive the marginal and average products of labor. [Play Pencast]


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Short-Run Production: An Application

This Pencast covers short-run production by using a an explicit form production function. Plots of the production function, marginal product of labor and average product of labor are provided. [Play Pencast]


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Interpretation of the Marginal Product of Labor Curve

This Pencast discusses the shape of the marginal product of labor curve and the economic intuition behind its shape. [Play Pencast]


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Law of Diminishing Marginal Returns

This Pencast defines the law of diminishing marginal returns and shows how to determine mathematically whether the law applies to a give production function. [Play Pencast]


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Long-Run Production

This screencast discusses long-run production, with emphasis on all inputs being variable. Thus, a particular level of output can be produced with many different combinations of inputs. [Play ScreenCast]


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Properties of Isoquants

This Screencast discusses the four key properties of isoquants. [Play ScreenCast]


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Shapes of Isoquants

This Pencast illustrates isoquants that have different shapes, including inputs that are perfect substitutes, inputs that are not substitutable and inputs that imperfectly substitutable. [Play Pencast]


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Marginal Rate of Technical Substitution

This Pencast shows how to use calculus to find the slope of an isoquant, which is referred to as the marginal rate of technical substitution. [Play Pencast]


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Marginal Rate of Technical Substitution: An Application Using a Cobb-Douglas Production Function

This Pencast uses the Cobb-Douglas production function to derive the marginal products of labor and capital and the marginal rate of technical substitution. [Play Pencast]


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Diminishing Marginal Rate of Technical Substitution

This Pencast illustrates the concept of diminishing marginal rate of technical substitution, which effectively means that the slope of an isoquant tends to flatten as more of one input (the one of the x-axis) is substituted for the other input (the one of the y-axis).[Play Pencast]


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Elasticity of Substitution

This Pencast describes a measure that indicates the ease at which a firm can substitute between inputs, which is called the elasticity of substitution. [Play Pencast]


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Returns to Scale

This Pencast covers constant, increasing and decreasing returns to scale and provides an example of how to determine whether the Cobb-Douglas production function exhibits constant, increasing and decreasing returns to scale. [Play Pencast]


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Technical Progress

This Pencast describes and provides examples of neutral technical changes that are time constant, neutral technical changes that vary over time and nonneutral technical changes. [Play Pencast]


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