2. Cost And Production Flashcards
1
Q
production function
A
Q = f(x1, x2,… , xn)
2
Q
return to scale
A
relation between total output and proportional variation of all inputs together
3
Q
constant return to scale
A
x (t.w, t.s) - t . x(w,s)
4
Q
decreasing return to scale
A
x (t.w, t.s) < t . x(w,s)
5
Q
increasing return to scale
A
x (t.w, t.s) > t. x(w,s)
6
Q
fixed cost
A
incurred even if no output is produced
7
Q
variable cost
A
change as production quantity changes
8
Q
total cost
A
the cost of producing total output (fixed cost + variable cost)
9
Q
marginal cost
A
dTC(Q) / dQ
10
Q
return to factor
A
are often called product
only one input is vary
11
Q
total product
A
amount of output obtained when the level of input x changes Q(x)
12
Q
average product
A
Q(x) / x
13
Q
marginal product
A
△Q / △x
