Cost Of Production Flashcards
Having each worker focus on the particular facet of production is
Specialization
The Change in total product that results from hiring one more worker is called…
Marginal product
___ show the relationship between labor and marginal product
Marginal product schedule
____ occurs when hiring new workers cause marginal products to increase
Increasing returns
____ occur when hiring new workers cause marginal product to decrease
Diminishing returns
_____ happens when marginal product becomes negative and total output decreases
Negative returns
____ are expenses that the owners of a business must incur whether they produce nothing, little or a lot
Fixed costs
_____ are business costs that vary as the level of production output changes
Variable costs
Businesses find the total cost of production by adding ___ and ____
Fixed and variable costs
____ is the extra cost of producing one more unit
Marginal cost
_____ is the added revenue per unit of output, or the money made from each additional unit cost
Marginal revenue
____ is the income a business receives from selling a product
Total revenue
You determine profit by subtracting ___ and ___
Total cost from total revenue
____ is the level of production at which a business realizes the greatest amount of profit
Profit maximizing output
