Cambridge International as and a level Economics Ebook

Isoquant: 
a curve showing a particular level of output.
KEY TERM
The short-run production function
To simplify our analysis, let us assume that the size of a 
clothing factory is given and that the only way in which 
the units of clothing produced can be varied is through 
varying the input of labour. Th
is time period is referred to 
as the short run. In terms of factors of production, labour 
is the usual variable factor of
 
production; all others – 
that is, capital, enterprise and land – are fi xed factors of
 
production. 
Table 7.3
 shows how the quantity of clothing 
10
9
8
7
6
5
4
3
2
1
0
Units of labour
1
2
3
4
5
6
7
8
9
10
Units of capital
B
A
C
x
z
y
(100 units of production)
Figure 7.5 
Alternative production methods
A clothing factory in India
150
Cambridge International A Level Economics

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produced depends on the number of workers employed. 
For example, if there are no workers in the factory, there is 
no output or 
total product
; with one worker, total product 
is 100 units. When there are two workers, the total product 
is 180 units and so on.
Total product: 
total output.
KEY TERM
Figure 7.6 
is a graph of the fi rst two columns of data in 
Table 7.3.
It shows the relationship between the quantity 
of factor inputs (labour/workers) and the total product or 
output of clothing. Th
is graph is called the 
production 
function
. Th
e third column of 
Table 7.3 
shows the