Technology

Question 1

technology

Answer 1

The processes a firm uses to turn inputs into outputs of goods and services.

Question 2

The short run ___________

Answer 2

a period of time during which at least one of a firm’s inputs is fixed.

Question 3

In the long run________________.

Answer 3

All inputs are Variables

Question 4

Variable costs are

Answer 4

costs that change as output changes

Question 5

Fixed costs are

Answer 5

costs that remain constant as output changes.

Question 6

Total cost

Answer 6

Variable Costs (VC) + Fixed Costs (FC) . The cost of all the inputs a firm uses in production

Question 7

Explicit cost:

Answer 7

A cost that involves spending money

Question 8

Implicit cost:

Answer 8

A non-monetary opportunity cost

Question 9

The items in red are

Answer 9

explicit costs.

Question 10

The items in blue are

Answer 10

implicit costs: her foregone salary, the interest the money could have earned

Question 11

production function

Answer 11

the relationship between the inputs employed and the maximum output from those inputs

Question 12

average total cost

Answer 12

divide the total cost (TC) by the number provided (Q) . ACT= TC/Q

Question 13

Why does the average total cost decrease at first when you add an additional worker (from 1 to 2 workers)

Answer 13

specialization & division of labor

Question 14

marginal product of labor:

Answer 14

the additional output a firm produces as a result of hiring one more worker.

Question 15

Law of diminishing returns:

Answer 15

At some point, adding more of a variable input, such as labor, to the same amount of a fixed input, such as capital, will cause the marginal product of the variable input to decline.

Question 16

average product of labor

Answer 16

the total output produced by a firm divided by the quantity of workers. Q/L- APL

Question 17

marginal cost

Answer 17

the change in a firm’s total cost from producing one more unit of a good or service.

Question 18

Total Cost=

Answer 18

Fixed Cost + Variable Cost

Question 19

Average Total Cost (AC/Q)=

Answer 19

Average Fixed Cost (FC/Q) + Avergage Variable Cost (VC/Q)

Question 20

long-run average cost curve

Answer 20

shows the lowest cost at which a firm is able to produce a given quantity of output in the long run, when no inputs are fixed.

Question 21

At low quantities, a firm might experience economies of scale:

Answer 21

the firm’s long-run average costs falling as it increases the quantity of output it produces.

Question 22

minimum efficient scale.

Answer 22

The lowest level of output at which all economies of scale are exhausted

Question 23

constant returns to scale:

Answer 23

long-run average cost remains unchanged as it increases output.

Question 24

diseconomies of scale

Answer 24

a situation in which a firm’s long-run average costs rise as the firm increases output.

Question 25

isoquant

Answer 25

a curve showing all combinations of two inputs, such as capital and labor, that will produce the same level of output.