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39 Cards in this Set
- Front
- Back
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inputs
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resources that go into production
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outputs
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the results of production
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waste products
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outputs that aren't used either for consumption or in a further production process
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final goods
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goods that are ready for use by people
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accounting costs
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the costs of a project, figured in terms of monetary outflows alone
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economic costs
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the costs of a project, including opportunity costs
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internal costs
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the costs of a project, including opportunity costs
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external costs
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the costs of a project that are borne by persons, or entities, that aren't among the economic actors
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technically efficient
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the quality of a production process if no other process exists that can produce the same output with smaller quantities of some inputs and no more of other inputs
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social costs of production
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the costs of a project, both those borne by the economic actors involved those borne by others, figured in terms of opportunity costs
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false economies
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cost savings that are illusory because long-term and social costs haven't been taken into account
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production function
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an equation or graph that represents a mathematical relationship between types and quantity of inputs and the quantity of output
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fixed input
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an input to production that is fixed in quantity, no matter what the level of production
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variable input
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an input to production the quantity of which can be quickly changed, resulting in changes in the level of production
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shot run
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a time period in which at least one input to production cannot be varied in quantity
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limiting factor
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the fixed input that creates a capacity constraint
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capacity constraint
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a case in which some fixed input limits the amount that can be produced in a given period of time
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long run
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a time period in which all inputs to production can be varied in quantity
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total product curve
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a curve showing the total amount of output that can be produced when the quantity of one input is varied
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marginal return
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the additional quantity of output gained by using and additional unit of a variable input
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diminishing marginal returns
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the case where the use of an additional unit of a variable inputs produces a lesser additional quantity of output than the previous unit of the input
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constant marginal returns
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the case where the use on an additional unit of a variable input produces the same quantity of additional output as did the previous unit of the input
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increasing marginal reutrns
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the case where the use of an additional unit of a variable input produces a greater quantity of additional output than did the previous unit of the input
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fixed cost
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the cost associated with using fixed inputs, which is the same no matter what quantity of output is produced
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variable cost
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the cost associated with using variable inputs, which rises with the quantity of output
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total cost
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the sum of fixed cost and variable cost
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total cost curve
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a curve showing the total cost associated with producing various levels of outputs
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marginal cost
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the cost associated with producing the last unit of output
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increasing marginal costs
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the case where the cost of producing an additional unit of output rises as more output is produced
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constant marginal costs
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the case where the cost of producing an additional unit of output stays the same as more output is produced
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decreasing marginal cost
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the case where the cost of producing an additional unit of output flls as more output is produced
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average cost
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cost per unit of output
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long run average cost
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the cost of production per unit of output when all inputs can be varied in quantity
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economics of scale
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these occur when the long-run average cost of production falls as the size of the enterprise increases
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constant returns to scale
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these occur when the long-run average cost of production stays the same as the size of the enterprises increases
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diseconomies of scale
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these occur when the long-run average cost of production rises as the size of the enterprise increases
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minimum efficient scale
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the smallest size on enterprise can be and still benefit from low run average costs
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maximum efficient scale
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the largest size an enterprise can be and still benefit from the low long-run average costs
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input substitution
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increasing the use of some inputs, and decreasing that of others, while producing the same good or service
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