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10 Cards in this Set
- Front
- Back
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A producers "Production Function" is the relationship between..
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inputs and outputs.
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The "Total Product Curve" shows..
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how the quantity of output changes as the variable input changes.
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There are "Diminishing Returns to an Input" when..
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it's marginal product declines more if the input is used, holding the quantity of all other inputs fixed.
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Total cost (represented by the total cost curve) is equal to..
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the sum of the fixed cost (which does not depend on output) and the variable cost (which does depend on output)
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Average Total Cost is the cost of..
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the average unit of input
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Average Fixed Costs..
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fall when output increases (the spreading effect)
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Average Variable Costs..
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rise with output (diminishing returns effect)
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The point of "Minimum-cost Output" is when the ________________ is minimized.
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Average Total Cost
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The "Long-Run Average Total Cost Curve" shows..
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the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost at each level of output.
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As output increases, there are "Economies of Scale" if..
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long-run average total cost declines.
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