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9 Cards in this Set
- Front
- Back
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Circular Flow
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the flow of goods and services and money between household and business sectors.
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Total Physical Product (TPP)
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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
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Law of Diminishing Marginal Returns
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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
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Average Physical Product (APP)
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output per unit of resource
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Marginal Physical Product
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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
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APP equation
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APP=(total output)/(# of mechanics)
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MPP equation
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MPP=(change in output)/(change in # of mechanics)
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Average Total Cost (ATC)
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per unit cost; total cost divided by the total output
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Marginal Cost (MC)
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the additional cost of producing one more unit of output
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