chp 13 Flashcards

1
Q

the firms goal is to…

A

maximize profit

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2
Q

explicit costs

A

input costs that require an outlay of money by the firm

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3
Q

implicit costs

A

input costs that do not require an outlay of money by the firm

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4
Q

economic profit

A

total revenue minus toal cost

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5
Q

accounting profit

A

total revenue minus total explicit costs

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6
Q

production function

A

relationship between the input of making a good and the output of it

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7
Q

marginal product

A

the increase on output from an increase in input

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8
Q

diminishing marginal product

A

decrease in output from an increase in input

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9
Q

marginal cost

formla

A

the increase in total cost that arises from extra production

MC= △TC/△Q

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10
Q

efficient scale

A

the quantity of input that minimizes average total cost

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11
Q

economies of scale

A

long run average total cost falls as output increases

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12
Q

diseconomies of scale

A

long run average total cost rises as output increases

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13
Q

constant return to scale

A

long run average total cost stays the same as output changes

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14
Q

average total cost formula

A

ATC= TC/Q

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