| A | B |
|---|
| Production Function | A graphic portrayal showing how a change in the amount of a single variable input affects total ouput |
| total product | Total output or production by a firm |
| short run | production period so short that only variable inputs (usually labor) can be changed |
| long run | production period long enough to change amount of variable and fixed inputs used in production |
| Stages of production | Phases of production that consist of increasing, decreasing, and negative returns |
| marginal product | Extra output due to the addition of one more unit of input |
| diminishing marginal returns | Stage of production where ouput decreases at a decreasing rate as more units of variable input are added (stage 2) |
| Increasing marginal returns | Stage of the production funtion in which the marginal product of each additional worker increases (Stage 1) |
| Negative marginal returns | Stage where the marginal product of each additional worker is negative as the workers get in each others way or otherwise interfere with production. |
