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23 Cards in this Set
- Front
- Back
- 3rd side (hint)
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what are explicit costs
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the opportunity costs of production that require a monetary payment
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pay for labor services
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implicit costs
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the opportunity costs of production that do not require a monetary payment
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no money
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profits
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the difference between total revenue and total cost
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accounting profits
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total revenues minus total explicit costs
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economic profits
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total revenue minus explicit and implicit costs
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sunk costs
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costs that have been incurred and cannot be recovered
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short run
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a period too brief for some production inputs to be varied
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long run
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a period over which all production inputs are vaiable
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total product (TP)
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the total output of a good produced by the firm
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marginal product
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the change in total output of a good that results from a unit change in input
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diminishing marginal product
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as a variable input increases, with other inputs fixed, a point will be reached where the additions to output wil eventually decline
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fixed costs
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costs that do not vary with the level of output
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variable costs
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costs that vary witht he level of output
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total variable cost (TVC)
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the sum of the firm's variable costs
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total cost (TC)
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the sum of the firm's total fixed costs and total varialbe costs
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average total cost (ATC)
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a per unit cost of peration; total cost divided by output
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average fixed cost (AFC)
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a per unit measure of fixed costs; fied costs divided by output
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average variable cost (AVC)
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a per unit measure of variable costs; variable costs divided by output
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marginal cost
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the change in total costs resulting from a one unit change in output
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economies of scale
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occur in an output range where LRATC falls asw output increases
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constant returns to scale
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occur in an output range where LRATC does not change as output varies
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diseconomies
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occur in an output range where LRATC rises as output expands
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minimum efficient scale
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the output level where economies of scale are exhausted and constatnt returns to scale begin
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