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9 Cards in this Set

  • Front
  • Back
Circular Flow
the flow of goods and services and money between household and business sectors.
Total Physical Product (TPP)
the maximum output that can be produces when successive units of a variable resource are added to fixed amounts of other resources eg:laborers to an amount oflabor
Law of Diminishing Marginal Returns
when successive equal amounts of a variable resource are combined with a fixed amount of another resource, marginal increases in output that can be attributed to each additional unit of the variable resource will eventually decline
Average Physical Product (APP)
output per unit of resource
Marginal Physical Product
the additional quantity that is produced when one additional unit of a resource is used in combination with the same quantities of all other resources
APP equation
APP=(total output)/(# of mechanics)
MPP equation
MPP=(change in output)/(change in # of mechanics)
Average Total Cost (ATC)
per unit cost; total cost divided by the total output
Marginal Cost (MC)
the additional cost of producing one more unit of output