Cost and production theory Flashcards
the primary objective of producers in supplying goods and services is to obtain _|
Profit
a concept that results from the relationship between the revenues and the cost
Profit
based on the production system and the technology used in producing goods and services
Cost of production
inputs that will still undergo further processing
Intermediate Input or Raw Materials
are a productive input that transforms raw materials into processed product
Factor Inputs
defined as a technical relationship between the outputs and factor inputs
Production Function or Factors of Production
is a measure of how resources are properly utilized in various activities
Efficiency
it is a condition of a firm to produce the maximum outputs in a given set of factor inputs
Technical Efficiency
the use of resources will yield the minimum cost of production
Economic Efficiency
the monetary cost incurred in the production of goods and services
Accounting Cost
includes opportunity cost
Economic Cost
is a production period when output can be changed as well as some of the other factor inputs
Short-run
are allowed to vary and alter production
Labor and Capital
locus of points showing different combinations of variables input (land and capital) that will give the same level of production
Isoquant
a locus of point showing different combinations of variables input that will result in the same total cost of the firm given the prices inputs and the total cost of the firm
Isocost
