Micro Economics 3 Flashcards
1
Q
Fixed Costs
A
Don’t change with more output produced (manager salary)
2
Q
Variable Costs
A
Change with more output (resources like cheese)
3
Q
Fixed Resources
A
Don’t change with more output
4
Q
Variable Resources
A
Change with more ouput
5
Q
When is a company in the short run?
A
When the habe at least one fixed resource
6
Q
In the Long Run…
A
…all resources are variable
7
Q
The Law of Diminishing Marginal Returns
A
As you add variable resources to fixed resources the additional output will eventually decrease.
8
Q
Total Cost
A
Variable + Fixed Costs
9
Q
Marginal Cost
A
Change in Total Costs / Change in Output
10
Q
AVC
A
Variable Cost / Quantity
11
Q
AFC
A
Fixed Cost / Quantity
12
Q
ATC
A
Total Cost / Quantity
