| A | B |
|---|
| Theory of Production | Relationship between the factors of production and goods and services produced |
| Short Run | Period of time that allows producers to adjust variable inputs like labor |
| Long Run | Period of time for producers to adjust ALL of their factors of production |
| Law of Variable Proportions | Output changes with variance of one input |
| Production Function | The relationship between changes of inputs affect on output |
| raw materials | unprocessed natural products |
| total product | total output produced by a firm |
| Marginal Product | change in product due to the adjustment of a variable |
| Stages of production | Regions of production characterized by production |
| Increasing Returns | When product and marginal product are both growing |
| Diminishing Returns | when production is increasing but marginal product is decreasing |
| Negative Returns | When both total product and marginal product are shrinking |
