**4.1 The Basics of Production **

4.1.1 Understanding Output, Inputs, and the Short Run

4.1.2 Explaining the Total Product Curve

4.1.3 Drawing Marginal Product Curves

4.1.4 Understanding Average Product

4.1.5 Relating Costs to Productivity

**4.2 Variable Costs **

4.2.1 Defining Variable Costs

4.2.2 Graphing Variable Costs

4.2.3 Graphing Variable Costs Using a Geometric Trick

**4.3 Marginal Costs **

4.3.1 Defining Marginal Costs

4.3.2 Deriving the Marginal Cost Curve

4.3.3 Understanding the Mathematical Relationship between Marginal Cost and Marginal Product

**4.4 Average Costs **

4.4.1 Defining Average Variable Costs

4.4.2 Understanding the Relationship between Average Variable Cost and Average Product of Labor

4.4.3 Understanding the Relationship between Marginal Cost and Average Variable Cost

**4.5 Total Costs **

4.5.1 Defining and Graphing Average Fixed Cost and Average Total Cost

4.5.2 Calculating Average Total Cost

4.5.3 Putting the Cost Curves Together

**4.6 Long-Run Production and Costs **

4.6.1 Defining the Long Run

4.6.2 Determining a Firm's Returns to Scale

4.6.3 Understanding Short-Run and Long-Run Average Cost Curves

4.6.4 Shifts in Cost Curves

**4.7 Isocost/Isoquant Analysis **

4.7.1 Constructing Isocost Lines

4.7.2 Understanding Isoquants

4.7.3 Finding the Cost-Minimizing Combination of Capital and Labor