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17 Cards in this Set
- Front
- Back
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short run
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time period in which at least one input is fixed (cannot be changed)
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long run
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all inputs can be varied
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diminishing returns
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when the unit L yields a smaller Q than did the previous L
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fixed cost
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the cost of fixed inputs (does not vary as Q varies)
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variable cost
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the cost of variable inputs (varies as Q varies)
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total cost curve
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up and to the right almost linear
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economies of scale
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if below then ATC with increase capital, input is lower
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diseconomies of scale
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if above then ATC with increase in capital input is higher
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constant returns to scale
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if level then ATC is the same
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what basic economic concept is the basis of comparative advantage?
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oppurtunity cost
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comparative advantage
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exists when 2 producers have different oppurtunity costs
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marginal product equation
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mp=deltaQ / delta L
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marginal cost equation
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mc=deltaTC / deltaQ
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total cost equation
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tc=FC + VC
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Average Total Cost equation
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atc=TC / Q
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average fixed cost equation
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afc=FC / Q
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average variable cost
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avc=VC / Q
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