Production, Costs And Revenue

Question 1

Average cost

Answer 1

total production /output (cost per unit of output)

Question 2

Average revenue eq

Answer 2

Total revenue divided by total output (revenue per unit of output)

Question 3

Capital productivity

Answer 3

Output per unit capital

Question 4

Diseconomies of scale

Answer 4

When long-run average costs rise as output rises

Question 5

Division of labour

Answer 5

Different workers performing different tasks in a good/service’s production

Question 6

External economy of scale

Answer 6

When a firm benefits from the industry its apart of (out of its control)

Question 7

Fixed costs

Answer 7

Costs of production that do not vary with output, only in the short run

Question 8

Internal economies of scale

Answer 8

Benefits from growth of the firm itself

Question 9

Labour productivity

Answer 9

Output per worker

Question 10

Long run

Answer 10

Time period in whereall Fops are variable

Question 11

Long- run average cost

Answer 11

Long-run total costs per unit of output

Question 12

Long-run production

Answer 12

When a firm changes the scale of all fops

Question 13

Production

Answer 13

The combination of FoPs (inputs) into finished products (outputs)

Question 14

Productive efficiency

Answer 14

Minimised average total cost

Question 15

Productivity

Answer 15

Output per unit of input

Question 16

Profit eq

Answer 16

Total revenue - total cost

Question 17

Short run

Answer 17

Time period in which at least one of the fops are fixed and cannot be varied

Question 18

Specialisations

Answer 18

A worker only performing a specific task or a small range of tasks

Question 19

Technical economy of scale

Answer 19

Cost saving through changing the production process

Question 20

Total cost eq

Answer 20

FC + VC

Question 21

Total revenue eq

Answer 21

Price X Quantity

Question 22

Variable cost

Answer 22

Costs that do vary with output

Question 23

Output

Answer 23

the quantity of finished goods/services

Question 24

what are some factors affecting labour productivity

Answer 24

wage rate, technology, management, education/skills

Question 25

what are some advantages of specialisation

Answer 25

gives workers times to gain skills for one particular job, firms can be more efficient, makes a bigger task manageable

Question 26

Money

Answer 26

an object used as a medium of exchange between two parties

Question 27

average total cost eq

Answer 27

TC/Q

Question 28

average variable costs eq

Answer 28

VC/Q

Question 29

Average fixed costs eq

Answer 29

FC/Q

Question 30

why are average cost curves u-shaped in the short run

Answer 30

Due to the law of diminishing returns

Question 31

when do AFC decline

Answer 31

When there is higher output, because fixed costs are independent of output

Question 32

diminishing marginal returns

Answer 32

when employing extra workers leads to declining productivity

Question 33

Total profit

Answer 33

the total output produced by all workers

Question 34

Marginal product

Answer 34

Output produced by an extra worker

Question 35

diminishing returns

Answer 35

occur in the short-run, when one factor is fixed. If the variable factor increased, there will come a point where it will be less productive

Question 36

what happens to MC when diminishing returns occur

Answer 36

Decreaseing marginal product (MP) and increasing marginal cost (MC)

Question 37

where does the MC curve cut the SRAC curve

Answer 37

At its lowest point

Question 38

returns to scale

Answer 38

The relationship between increasing the quantity of input and the impact on output

Question 39

constant returns to scale

Answer 39

when output increases by the same proportion as the change in inputs

Question 40

increasing returns to scale

Answer 40

If output increases by more than the proportional change in input

Question 41

decreasing returns to scale

Answer 41

if output increases by less than the proportional change in input

Question 42

economies of scale

Answer 42

occur when LRAC fall with increasing output

Question 43

internal economies of scale

Answer 43

when an individual firm becomes more efficient

Question 44

types of internal economies of scale

Answer 44

Specialisation and division of labour, bulk buying, technical, financial economies, marketing, risk bearing

Question 45

external economies of scale

Answer 45

when a firm benefits from the whole industry getting bigger. Outside of its control

Question 46

reasons for diseconomies of scale

Answer 46

poor communication, alienation, lack of control

Question 47

average revenue eq

Answer 47

TR/Q

Question 48

Marginal revenue

Answer 48

the extra revenue gained from selling an extra unit