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Econ 2106 Extra Credit #2 > (7.3-6; 7.3-7; 7.3-8; 7.3-9; 7.3-10)-A. Smith > Flashcards

(7.3-6; 7.3-7; 7.3-8; 7.3-9; 7.3-10)-A. Smith Flashcards

1
Q

A guide for how much to produce is?

A

marginal cost

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2
Q

The cost of labor per unit of output produced

is ___________.

A

average cost

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3
Q

What does AVC stand for?

A

average cost variable

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4
Q

AVC = ?

A

VC(total variable cost) / TP (total output)

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5
Q

Does marginal cost and average variable cost

the same concept?

A

no

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6
Q

What two things are substantial in finding the

average variable cost?

A

total variable cost and total output

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7
Q

Do we, as economists, multiply or divide

variable cost and total product to get the average variable cost?

A

divide

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8
Q

What is AVC good for?

A

to see if one would make a profit or not

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9
Q

Does AVC vary when we change amount of

output?

A

yes

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10
Q

When does AVC change?

A

When the productivity changes

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11
Q

Productivity and cost are ________ related.

A

inversely

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12
Q

As price increases, cost _________.

A

decreases

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13
Q

Marginals and averages always have the

same relationships. True or False

A

True

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14
Q

When marginal increases, average ________.

A

increases

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15
Q

When marginal decreases, average

__________.

A

decreases

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16
Q

What is the slope of the variable cost curve.

A

Marginal cost

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17
Q

The AVC curve is at a __________ when it intersects with the MC curve.

A

minimum

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18
Q

When MC is above AVC, it pulls the

average ________

A

up

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19
Q

When MC is below AVC, it pulls the average

__________

A

down

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20
Q

Minimum slope = __________ AVC

A

minimum

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21
Q

Marginal cost is _________ related to

marginal product.

A

inversely

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22
Q

AVC is ________ related to average product.

A

inversely

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23
Q

What is the definition of slop?

A

rise over run

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24
Q

the curves of MC and AVC are ________

_______ to the curves of MP and AP.

A

mirror images

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25
Q

What is on the x-axis on the MC and AVC graph?

A

TP (output)

26
Q

Define Short run:

A

brief period of time that is so short that at

least one input is fixed

27
Q

Fixed input costs that are constant

A

fixed cost

28
Q

The more sets you _______, the more thinly

you can spread your fixed costs out

A

produce

29
Q

The more you produce, the more your fixed

costs _______

A

shrinks

30
Q

What is AFC?

A

average fixed cost

31
Q

Fixed cost per unit of output produced

A

Average fixed cost

32
Q

What two things deal with average fixed cost?

A

total fixed cost and total output

33
Q

As TP increases, AFC ________.

A

decreases

34
Q

AFC + AVC = ?

A

ATC

35
Q

What is ATC?

A

Average total cost of production

36
Q

We us _________ addition to get ATC.

A

vertical

37
Q

Average total cost =

A

total cost / quantity produced

38
Q

ATC is the sum of what two things?

A

variable cost and fixed cost

39
Q

What is the equation of ATC?

A

ATC = TC / TP

40
Q

is there a distinct number of methods to

calculate ATC?

A

yes

41
Q

If so, how many methods?

A

2

42
Q

Define average total cost.

A

the total cost of production divided by the

number of units produced

43
Q

What is VC / TP?

A

AVC

44
Q

What is FC / TP?

A

AFC

45
Q

ATC = ? + ?

A

AVC ; AFC

46
Q

Is average fixed cost impotant to determining the average cost?

A

yes

47
Q

What are the formulas for the two methods

to calculate ATC?

A 
ATC= TC / TP
ATC= AVC + AFC
48
Q

You have to determine total cost before

getting the average total cost.

A

True

49
Q

The concept of ATC is not important to

economists.

A

False

50
Q

How many variable costs are there in

microeconomics?

A

3

51
Q

How many fixed costs are there?

A

1

52
Q

Name the three variable costs

A

variable
marginal
average

53
Q

Define AVC (average variable cost):

A

cost of labor per unit of output produced

54
Q

Define AFC (average fixed cost)

A

fixed cost per unit of output produced

55
Q

In the ATC curve, costs fall because of what

two things:

A

increase in output

rises in productivity

56
Q

In the ATC curve, costs rise because of what?

A

decrease in productivity

57
Q

AFC shrinks as output _________

A

increases

58
Q

Define marginal cost:

A

cost of producing an extra unit of output

59
Q

Remember:

A

ATC = AFC + AVC

60
Q

Marginal cost curve cuts through the AVC

curve at the __________ point.

A

minimum

61
Q

Which one of the three would maximize profit for a firm?

  • MC
  • AFC
  • AVC
A

none of them would help maximize a profit

Econ 2106 Extra Credit #2 (4 decks)

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