1. Chapter Fifteen:
Production Costs

2. Types of Production Costs

3. Table 15.1: Gail’s Costs of Farming

4. The Production Function

5. Table 15.2: Corn Production Function

6. Figure 15.1: Corn Production Function
Corn yields per acre increase as more nitrogen fertilizer is applied, but at a decreasing rate.

7. Table 15.3: Calculating Marginal Product

8. Figure 15.2: Total Product Curves with Constant and Increasing Marginal Returns
A total product curve with constant marginal returns is a straight line sloping upward. In the case of increasing marginal returns, the total product curve becomes steeper as we move to the right.

9. Figure 15.3: A Total Product Curve with Increasing, Constant, and Decreasing Returns
Many real-world production functions display increasing, constant, and decreasing marginal returns when we consider the full range of production levels.

10. Table 15.4: Fixed, Variable, and Marginal Costs

11. Figure 15.4: The Total Cost Curve for Corn
A total cost curve shows the relationship between the total cost of production and the level of output.

12. Table 15.5: Marginal Cost of Corn Production

13. Figure 15.5: A Possible Pattern of Costs
The graphs show the relationship between total and marginal cost curves. For many real-world enterprises, their marginal cost curve is U-shaped.

14. Figure 15.6: A Possible Pattern of Long-Run Average Costs
Long-run average cost curves tend to be U-shaped, with a minimum and maximum efficient scale.