|
|
ALLOCATIVE EFFICIENCY: Obtaining the most consumer satisfaction from available resources. Allocative efficiency means that our economy is doing the best job possible of satisfying unlimited wants and needs with limited resources -- that is, of addressing the problem of scarcity.
Visit the GLOSS*arama
|
|
|
|
                           AVERAGE PRODUCT CURVE: A curve that graphically illustrates the relation between average product and the quantity of the variable input, holding all other inputs fixed. This curve indicates the per unit output at each level of the variable input. The average product curve is one of three related curves used in the analysis of the short-run production of a firm. The other two are total product curve and marginal product curve. The average product curve illustrates how average product is related to a variable input. While the standard analysis of short-run production relates average product to labor, an average product curve can be constructed for any variable input. | Average Product Curve |  |
The diagram to the right graphically represents the relation between average product and the variable input. This particular curve is derived from the hourly production of Super Deluxe TexMex Gargantuan Tacos (with sour cream and jalapeno peppers) as Waldo's TexMex Taco World restaurant employs additional workers. The number of workers, measured on the horizontal axis, ranges from 0 to 10 and the average Gargantuan Taco production per worker, measured on the vertical axis, ranges from 0 to 25.The shape of this average product curve is worth noting. For the first two workers of variable input, average product increases. This is reflected in a positive slope of the average product curve. After the third worker, the average product declines. This is seen as a negative slope. While average product continues to decline, it never reaches zero nor becomes negative. To do so would require total product to become zero and negative, which just does not happen. The hump-shape of the average product curve indirectly results from increasing and decreasing marginal returns. The upward-sloping portion of the average product curve, up to the second worker, is indirectly due to increasing marginal returns. The downward-sloping portion of the average product curve, after the third worker, is indirectly due to decreasing marginal returns. and the law of diminishing marginal returns.
Recommended Citation:AVERAGE PRODUCT CURVE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2019. [Accessed: December 12, 2019].
Check Out These Related Terms... | | | | | | | | | |
Or For A Little Background... | | | | | | | | | | | | | |
And For Further Study... | | | | | | | |
Search Again?
Back to the WEB*pedia
|
|
|
BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time searching for a specialty store seeking to buy either a genuine down-filled pillow or one of those "hang in there" kitty cat posters. Be on the lookout for high interest rates.
Your Complete Scope
This isn't me! What am I?
|
|
|
Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
|
|
|
"Defeat is simply a signal to press onward." -- Helen Keller, lecturer, author
|
|
WIPO
World Intellectual Property Organization
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
