Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 13 - Part V - The Costs of Production - Quick Check Multiple Choice - Page 275: 2

Answer

D. The Production function gets flatter, while the total-cost curve gets steeper

Work Step by Step

The production function compares inputs vs. outputs Think of inputs as the workers/laborers and the output as the amount of goods these workers produce. Total-cost curves compare the output vs. the total cost The diminishing marginal product means that each time an unit of input is added the benefit to increase the output decreases. On the production function as the workers increases the graph gets flatter because the law of diminishing marginal products show that per worker increase there benefits to creating more product gets less and less impactful. On the total-cost curve the curve gets steeper because it becomes more and more expensive to try to increase the output because hiring more workers will cost more and more and impact the company less and less. Also important to note that the output is on the y-axis for production functions whereas the output is on the x-axis for total-cost curves
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