Reading...
Play button
Play button
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;
17 Cards in this Set
- Front
- Back
|
When long run ave. costs decrease as a result of industry growth they are?
|
external economies
|
|
|
When ave. costs increase as a result of industry growth we say they are?
|
external diseconomies
|
|
|
A graph that traces out price and total output over time as an industry expands.
|
LRIS
|
|
|
An industry that realizes external economies(ave costs decrease as the industry grows) the long run supply curve for such an industry has a neg. slope
|
decreasing cost industry
|
|
|
An industry that encounters external diseconomies—that is, average costs increase as the industry grows. The long-run supply curve for such an industry has a positive slope.
|
increasing cost industry
|
|
|
An industry that
shows no economies or diseconomies of scale as the industry grows. Such industries have flat, or horizontal, long-run supply curves. |
constant cost industry
|
|
|
The demand for resources (inputs) that is dependent on the demand for the outputs those resources
can be used to produce. |
derived demand
|
|
|
The amount of output produced per unit of that input.
|
productivity of input
|
|
|
The additional output produced by one additional unit of labor.
|
marginal product of labor MPL
|
|
|
The additional revenue a firm earns by employing one additional unit of input, ceteris paribus.
|
marginal revenue product
|
|
|
MRPL = MPL x PX
|
mp of labor (capital is the same with k)
|
|
|
the profit maximizing amount of labor firms need to hire is the amount at which
|
MRPL= Wage
|
|
|
The tendency of firms to substitute away from a factor
whose price has risen and toward a factor whose price has fallen. |
factor subsitution effect
|
|
|
When a firm decreases (increases) its output in response to a factor price increase (decrease), this decreases (increases) its demand for all factors.
|
output effect of a factor price increase
|
|
|
The price of a good that is in fixed supply; it is determined exclusively by what firms and households are willing to pay for the good.
|
demand determined
|
|
|
The return to any factor of production that is in fixed supply.
|
pure rent
|
|
|
MP L K and A =
|
1/Px
|
