Google
Friday 
September 4, 2015 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
Today's Index
Yesterday's Index
270.3

Help us compile the AmosWEB Free Lunch Index. Tell us about your last lunch.

Skipped lunch altogether.
Bought by another.
Ate lunch at home.
Brought lunch from home.
Fast food drive through.
Fast food dine in.
All-you-can eat buffet.
Casual dining with tip.
Fancy upscale with tip.

More About the Index
Best TV Drama of the 1970s?

Charlie's Angels.
The Six Million Dollar Man.
The Waltons.
Wonder Woman.
Starsky & Hutch.
Little House on the Prairie.

AGGLOMERATION ECONOMIES: A reduction in production cost the results when related firms locate near one another. Firms can be related as competitors in the same industry, by using the same inputs, or through providing output to the same demographic group. The fashion industry, for example, experiences agglomeration economies because they can share specialized inputs (photographers, models) that would be too expensive to employ full time. Retail stores have agglomeration economies when located in shopping malls because they have access to a large group of potential customers with lower advertising cost. Agglomeration economies is given as one of the primary reasons for the emergence of urban areas.

Visit the GLOSS*arama


TOTAL PRODUCT AND MARGINAL PRODUCT:

A mathematical connection between marginal product and total product stating that marginal product IS the slope of the total product curve. If the total product curve has a positive slope (that is, is upward sloping), then marginal product is positive. If the total product curve has a negative slope (downward sloping), then marginal product is negative. If the total product curve has a zero slope (horizontal), then marginal product is zero.
The relation between total product and marginal product is one of several that reflect the general relation between a total and the corresponding marginal. There general relation is this: A marginal is the slope of the total curve. Marginal is another term for slope.

The general relation between total and marginal surfaces throughout the study of economics, especially utility (total utility and marginal utility), cost (total cost and marginal cost), revenue (total revenue and marginal revenue), and consumption (consumption expenditures and marginal propensity to consume).

Making Tacos

Total and Marginal Product
Product Curves
This two-paneled graph for the hourly production of Super Deluxe TexMex Gargantuan Tacos (with sour cream and jalapeno peppers) that visually illustrates the connection between total product and marginal product.
  • For the first few quantities of the variable input (the number of workers), total product in the top panel is positive AND the slope of the total product curve increases, it becomes steeper. This corresponds with a positive and increasing marginal product in the bottom panel.

  • For the next several quantities of the variable input, the slope of the total product curve flattens out, although positive, the slope decreases. This corresponds to a decreasing marginal product in the bottom panel.

  • For the last few quantities of the variable input, the slope of the total product curve in the top panel is negative. This corresponds with a negative marginal product in the bottom panel.

The Law of Diminishing Marginal Returns

The prime conclusion to drawn from this is the key role played by the law of diminishing marginal returns in the slope of both the marginal product curve and the total product curve. The "hump shape" of the marginal product curve is a direct reflection of first increasing marginal returns, as marginal product rises to a peak, then decreasing marginal returns and the onset of the law of diminishing marginal returns as marginal product falls.

However, because the marginal product curve is essentially a plot of the slope of the total product curve, the shape of the total product curve also reflects the law of diminishing marginal returns. The increasingly steep slope of the total product curve for small quantities of the variable input is due to increasing marginal returns. Then with the onset of the law of diminishing marginal returns causes the total product curve to flatten out and subsequently turn down.

<= TOTAL PRODUCT AND AVERAGE PRODUCTTOTAL PRODUCT CURVE =>


Recommended Citation:

TOTAL PRODUCT AND MARGINAL PRODUCT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2015. [Accessed: September 4, 2015].


Check Out These Related Terms...

     | total product and average product | average product and marginal product | production stages |


Or For A Little Background...

     | total-marginal relation | law of diminishing marginal returns | short-run production analysis | total product | marginal product | total product curve | marginal product curve | graphical analysis | marginal analysis | economic analysis |


And For Further Study...

     | average-marginal relation | production possibilities | short-run production analysis | long-run production analysis | law of diminishing marginal utility | law of increasing opportunity cost | total cost and marginal cost | total variable cost and marginal cost |


Search Again?

Back to the WEB*pedia


APLS

State of the ECONOMY

U.S. Job Openings
June 2015
5.2 million Down slightly
Bureau of Labor Statistics

More Stats

RED AGGRESSERINE
[What's This?]

Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius hoping to buy either several magazines on computer software or a T-shirt commemorating the second moon landing. Be on the lookout for high interest rates.
Your Complete Scope

This isn't me! What am I?

Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
"Don't waste your effort on a thing that results in a petty triumph unless you are satisfied with a life of petty issues. "

-- John D. Rockefeller, industrialist

Y
Income, Nominal Gross National Product
A PEDestrian's Guide
Xtra Credit
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



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2015 AmosWEB*LLC
Send comments or questions to: WebMaster