behind the supply curve

Question 1

what is a production function

Answer 1

it is the relationship between the quantity of inputs the firm uses and the quantity of outputs it produces

Question 2

what run is all inputs varied

Answer 2

long run

Question 3

what run is at least one input fixed

Answer 3

short run

Question 4

how can a firm increase output in the short run

Answer 4

increase the amount of workers

Question 5

what is total product

Answer 5

total output in a given period

Question 6

what is marginal product of labor

Answer 6

its the change in total product from a one unit increase or decrees in quantity of labor employed

Question 7

what is average product of labor

Answer 7

total product dived by quantity of labor employed so it finds out how much product each worker produces

Question 8

average product of labor equation

Answer 8

apl = total quantity of output / total quantity of labor employed

Question 9

marginal and average product relationship

Answer 9

when marginal product is greater than average then the average product is increasing when marginal product is less then the average product then the average product is decreasing

Question 10

what is a fixed cost

Answer 10

its a cost that doesn’t depend on the quantity of output produced. its the cost of the fixed input

Question 11

what is variable cost

Answer 11

its the cost that depends on the quantity of output produced

Question 12

what is total cost

Answer 12

its the fixed cost plus the variable cost

Question 13

what happens to the total cost curve when more output is produced

Answer 13

the curve gets steeper

Question 14

what happens to TVC when you increase your output

Answer 14

tvc will sharply rise due to diminishing returns

Question 15

what is marginal cost

Answer 15

its the change in total cost generated by one additional unit

Question 16

marginal cost formula

Answer 16

MC= change in total cost / change in quantity

Question 17

what is diminishing marginal returns

Answer 17

when the marginal cost raises and the output increases

Question 18

average fixed cost

Answer 18

its the total fixed cost per unit

afc= total fixed cost / quantity

Question 19

average variable cost

Answer 19

total variable cost per unit of output

avc = total variable cost / quantity

Question 20

average total cost

Answer 20

total cost per unit of output

atc = total cost / quantity

also atc = average fixed and variable costs added together

Question 21

what is the minimum cost output

Answer 21

quantity of output where the total cost is the lowest
this is where firms want to be

at the minimum cost output atc= mc

Question 22

marginal greater than average

Answer 22

average increases

Question 23

marginal less than average

Answer 23

average decreases

Question 24

marginal equal to average

Answer 24

average is at its minimum this is where the two lines intersect

Question 25

tech effect on cost curve

Answer 25

tech shifts the curve down cuz it makes the stuff cheaper to produce. tech will also increase the fixed cost but lower the variable cost

Question 26

what changes does a change in fixed cost cause

Answer 26

shifts the total and average total cost curves up but the marginal cost curve stays the same

Question 27

what are the factors of production

Answer 27

land labor and capital and entrepreneurs

Question 28

what is the relationship with fixed and variable cost

Answer 28

if fixed cost is low then variable cost will be high vice versa

Question 29

when should you have lower fixed cost

Answer 29

at low output levels

Question 30

when should you have a higher fixed cost

Answer 30

at high output levels

Question 31

what is the long run average cost curve

Answer 31

it shows the cost of producing each quantity and allowing for firms to choose its level of fixed costs