3.3

Question 1

Marginal revenue

Answer 1

The additional revenue of selling one extra unit of output

Question 2

Average Revenue

Answer 2

Total revenue / Output

Question 3

Total Revenue

Answer 3

Quantity X Price

Question 4

Total costs

Answer 4

Fixed (does not vary with output) + variable costs (varies with output)

Question 5

Average cost

Answer 5

The average cost of producing one unit

Question 6

Marginal cost

Answer 6

The cost of producing one additional unit of output

Question 7

Short-run costs

Answer 7

At least some costs are fixed.

Question 8

Long-run costs

Answer 8

All costs can be variable

Question 9

At what point does the MC curve cut the ATC curve

Answer 9

Where ATC is at the lowest point.

Question 10

Total product

Answer 10

The total output produced by a firm given the factors of production

Question 11

How do you calculate total product

Answer 11

Average product X units of variable input

Question 12

Marginal product

Answer 12

The difference between total output when an extra unit of the variable factor

Question 13

How to calculate marginal product

Answer 13

Change in total output / change in variable input

Question 14

Average product

Answer 14

The total output produced by a firm

Question 15

Average product calculations

Answer 15

total output / units of variable input

Question 16

The law of Diminishing Marginal Productivity

Answer 16

If one factor of production is increased while others are kept fixed then productivity will eventually fall.
At first MP increases but eventually decreases due to communication issues etc.

Question 17

The law of diminishing marginal productivity (labour)

Answer 17

As more employees are employed, productivity will eventually decrease as they begin to get in the way of each other and become inefficient. (short-run all other FOP are fixed)