3. The marginal product of input 1 derived from the production function y=min[az 1, bz 2], diminishes for increases in input 1. 4. If the average product is declining, then average total cost must be ...

A variable cost increases as production volume increases, and falls as production volume decreases. For example, a toy manufacturer must package its toys before shipping them out to stores.

The penny, whose face value is a modest 1 cent, cost about 3.7 cents to make last year. They aren’t the only expensive coin.

Labor that is used to service and consult the production of goods is also included in prime costs. Direct labor examples ...

In the case of pollution—the traditional example of a negative externality—a polluter makes decisions based only on the direct cost of and profit opportunity from production and does not consider the ...