chapter 5 Flashcards
1
Q
when avc is at its minimum
A
avc= mc
2
Q
when AVC increases
A
MC> AVC
3
Q
when AVC decreases
A
AVC> MC
4
Q
when ATC is at its minium
A
atc= mc
5
Q
when ATC increases
A
MC> ATC
6
Q
when ATC decreases
A
ATC> MC
7
Q
if MPL increases
A
mc decreases
8
Q
if APL increases
A
avc decreases
9
Q
where does lTC come from
A
expansion oath
10
Q
what are the points on the expansion path
A
The points on the expansion path are the
cost-minimizing combinations of labor
and capital for each output level.
11
Q
The shape of the long-run total cost function
depends o
A
the returns to scale of the production
function
12
Q
if Q increase and LAC DECREASES
A
economies of scale
13
Q
if Q increases and LAC ibcrease s
A
diseconomies of scale
14
Q
what is the break even point
A
is the output level that makes the
firm’s profit equal to zero. tfc/ (p-avc)
