Econ Midi

Front 1

what is The Production Function

Back 1

specifies the maximum amount of output that a firm can produce with a given quantity of inputs for a given state of technology.

Front 2

what is The Law of Diminishing Returns

Back 2

states that if we vary one of the inputs, keeping all other inputs as well as the technological level
constant, then, at least after some point, successive additional
units of the variable input will add less and less to the Total output. That is, the Marginal Product of each additional unit of the
variable input will decrease as the amount of that input increases, all else equal.

Front 3

What is the Short Run

Back 3

is defined as a period of time in which only the variable
inputs, such as labor and materials, could be adjusted.

Front 4

what is the Long Run

Back 4

is defined as a period of time in which all inputs, including fixed factors, such as capital, could be adjusted.

Front 5

What are Fixed Costs (FC)

Back 5

are the costs that the firm has to pay even is it does not produce anything. Fixed costs do not depend on the level
of output produced

Front 6

What does the Total Cost (TC) represent?

Back 6

resents the total amount of money spent in al l the inputs required for the a business firm on order to produce a given level of output.

Front 7

What are Variable Costs, (VC)

Back 7

are the costs that vary and are directly related to output

Front 8

what is Marginal Cost (MC)

Back 8

as the additional expenditure that a firm has to incur in order to produce one more unit
of output.

Front 9

What is Average Cost

Back 9

the ratio between the Total cost and
the quantity produced.

AC = TC/Q

Front 10

What is Average Fixed Cost (AFC)

Back 10

is defined as the ratio between fixed
costs and quantity of output produced:

AFC = FC/Q

Front 11

what is Average Variable Cost (AVC)

Back 11

is defined as the ratio between fixed costs and quantity of output produced:

AVC = VC/Q

Front 12

What is The Balance Sheet

Back 12

is a statement of the financial condition of the firm at a certain point of time. It lists the Assets of the firm (things that the firm owns), the Liabilities of the firm (things that
the firm owes), and the Net Worths of the firm (the difference
between assets and liabilities):

Net Worth = Assets - Liabilities

Front 13

What is The Income Statement

Back 13

is a statement of the financial performance
of the firm over a certain period of time. It lists the Revenue of the firm, the Costs of the firm, and the Profits of the firm, which are defined as difference between the revenue and the costs.
Profits = Revenue −Costs

The Income Statement is a statement of the financial performance
of the firm over a certain period of time. It lists the Revenue of the firm, the Costs of the firm, and the Profits of the firm, which are defined as difference between the revenue and the costs.

Profits=Revenue −Costs

Front 14

What is Perfect Competition

Back 14

is defined as a market setting involving large number of profit-maximizing firms that sel l a homogeneous product and cannot individually affect the market price. Furthermore,
free entry and exit are assumed in a perfectly competitive market structure.

Front 15

When does Imperfect competition happen

Back 15

prevails in an industry where individual
sel lers have some control over the price of their output.

Front 16

When does Monopoly exists?

Back 16

when a single firm is the sole producer of a product for which there are no close substitutes.

Front 17

When does Oligopoly exists

Back 17

when a few large firms producing a homogeneous or differentiated product dominate a market.

Front 18

What is Monopolistic competition

Back 18

is a market structure in which a relatively large number of sellers offer similar but not identical products.

Front 19

What are Barriers to entry

Back 19

are the factors that prevent new firms from entering an industry.

Front 20

What are cartels

Back 20

is a group of producers that creates a formal written
agreement specifying how much each member will produce and
charge.

Such as OPEC

Front 21

What is price discrimination

Back 21

occurs when a given product is sold at more than one price and the price differences are not based on cost differences.