Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

21 Cards in this Set

  • Front
  • Back
Production function
the relationship between the quantity of inputs a firm uses and the quantity of output it produces.
fixed input
input where the quantity is fixed and can't be varied.
variable input
input where the quantity can vary.
long run
time period where all inputs can be varied
short run
time period where at least 1 input is fixed
total product curve
shows how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input.
marginal product
the additional quantity of output that is produced by using one more unit of that input.
diminishing returns to an input
when an increase in the quantity of that input, holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input.
fixed cost
cost that doesnt depend on the quantity of output produced. it is the cost of the fixed input.
variable cost
a cost that depends on the quanity of output produced. it is the cost of the variable input.
Total cost
fixed cost + variable cost
Total cost curve
shows how total cost dpeneds on the quantity of output.
Average total cost
total cost/total output
u shaped average total cost curve
falls at low levels of output then rises at higher levels
average fixed cost
fixed cost/output
Average variable cost
variable cost/output
minimum cost output
the # of output when the average total cost is lowest. The min of the U shaped ATC curve
long run atc curve
the connectioin of all the short run atc curves
economies of scale
when the long run atc declines as output increases
diseconomies of scale
when the long run atc increases as output increases
constant returns to scale
whne the long run atc is constant as output increases