Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
32 Cards in this Set
- Front
- Back
|
Payment that must be made to obtain and retain the services of a resource |
Economic cost |
|
|
The monetary payments a firm makes to those whom it must purchase resources that it does not own |
Explicit cost |
|
|
The opportunity costs of using the resources a firm already owns rather than selling them for cash |
Implicit costs |
|
|
The profit number that accountants calculate by subtracting total explicit costs from total sales revenue |
Accounting profit |
|
|
Amount of accounting profit that you would have likely earned in another venture (opportunity cost) |
Normal profit |
|
|
The result of subtracting all economic costs, both implicit and explicit |
Economic profit |
|
|
Time period too brief for a plant to change its capacity but can change the way the capacity is used |
Short run |
|
|
Period of time long enough for a firm to adjust the quantities of all the resources it employs, including plant capacity |
Long run |
|
|
The total quantity or total output of a particular good or service |
Total product |
|
|
Output per unit of labor input |
Average product |
|
|
Costs that do not vary with changes in output |
Fixed costs |
|
|
Costs that change with the level of output |
Variable costs |
|
|
Sum of fixed cost and variable cost at. Each level of input |
Total cost |
|
|
Found by dividing total fixed cost by the output level used |
Average fixed cost |
|
|
Found by dividing total variable cost by the output level used |
Average variable cost |
|
|
Found by dividing total cost by the output used |
Average total cost |
|
|
Explains the downsloping part of atc |
Economies of scale |
|
|
Explains upsloping part of atc |
Diseconomies of scale |
|
|
Flat part of atc |
Constant returns to scale |
|
|
Lowest level of output at which a firm can minimize long run average costs |
Minimum efficient scale |
|
|
Average cost is minimized when only one firm produces the particular good or service |
Natural monopoly |
|
|
a very large number of firms producing a standardized product |
Pure competition |
|
|
One firm is the sole seller of a product or service |
Pure monopoly |
|
|
A large number of sellers producing differentiated products (sales not based on price) |
Monopolistic competition |
|
|
A few sellers of a standardized or differentiated product |
Oligopoly |
|
|
Caused by the number of firms being so high that one single firm has no control on the market and takes whatever price given |
Price taker |
|
|
Revenue per unit |
Average revenue |
|
|
Found by multiplying price by the corresponding quantity a firm can sell |
Total revenue |
|
|
Change in total revenue that results from selling one or more unit of output |
Marginal revenue |
|
|
An output at which a firm makes a normal profit but not an economic profit |
Break even point |
|
|
In the short run, the firm will maximize profit or minimize loss by producing the output at which marginal revenue equals marginal cost. (only if producing is more profitable than shutting down |
Mr=mc rule |
|
|
The portion of a firms marginal cost curve lying above its average variable cost curve is it's short run supply curve |
Short run supply curve |
