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In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs. [1] Under some simplifying assumptions about the production technology, growth in TFP becomes the portion of growth in output not explained by growth in traditionally ...
Graph of total, average, and marginal product In economics , a production function gives the technological relation between quantities of physical inputs and quantities of output of goods. The production function is one of the key concepts of mainstream neoclassical theories, used to define marginal product and to distinguish allocative ...
Wire-grid Cobb–Douglas production surface with isoquants A two-input Cobb–Douglas production function with isoquants. In economics and econometrics, the Cobb–Douglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the amounts of two or more inputs (particularly physical capital and labor) and ...
A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), Gross national income (GNI), net national income (NNI), and adjusted national income (NNI adjusted for natural resource depletion – also called as NNI at factor cost).
Taxes on production and imports minus subsidies are added to get from factor cost to market prices. Depreciation (or capital consumption allowance) is added to get from net domestic product to gross domestic product. Total income can be subdivided according to various schemes, leading to various formulae for GDP measured by the income approach.
The average product of labor (APL) is the total product of labor divided by the number of units of labor employed, or Q/L. [2] The average product of labor is a common measure of labor productivity. [4] [5] The AP L curve is shaped like an inverted “u”. At low production levels the AP L tends to increase as
In set theory, a Cartesian product is a mathematical operation which returns a set (or product set) from multiple sets. That is, for sets A and B, the Cartesian product A × B is the set of all ordered pairs (a, b) —where a ∈ A and b ∈ B. [5] The class of all things (of a given type) that have Cartesian products is called a Cartesian ...
The total cost of producing a specific level of output is the cost of all the factors of production. Often, economists use models with two inputs: physical capital , with quantity K and labor, with quantity L. Capital is assumed to be the fixed input, meaning that the amount of capital used does not vary with the level of production in the ...