econ 13-15 - Assignment Essays

econ 13-15

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Posted on

May 24th, 2023

question

industrial organization

answer

the study of how firms' decisions about prices and quantities depend on the market conditions they face

question

goal of a firm

answer

maximize profit

question

total revenue

answer

Price x Quantity (amount a firm receives for the sale of its output)

question

total cost

answer

fixed costs plus variable costs (market value of the inputs a firm uses in production); explicit + implicit

question

profit

answer

TR-TC

question

explicit costs

answer

input costs that require an outlay of money by the firm

question

implicit costs

answer

opportunity costs

question

economic profit

answer

TR - explicit - implicit

question

accounting profit

answer

TR - explicit

question

production function

answer

the relationship between quantity of inputs used to make a good and the quantity of output of that good

question

marginal product

answer

the increase in output that arises from an additional unit of input

question

diminishing marginal product

answer

the property whereby the marginal product of an input declines as the quantity of the input increases

question

fixed cost

answer

Costs that do not vary with the quantity of output produced; even is firm produces nothing, these costs still occur (rent)

question

variable cost

answer

a cost that varies with changes in the level of output; paper cups for coffee

question

average total cost

answer

TC/Q or AFC + AVC

question

average fixed cost

answer

FC/Q

question

average variable costt

answer

VC/Q

question

marginal cost

answer

change in TC/change in Q

question

efficient scale

answer

the quantity that minimizes ATC

question

ATC falling

answer

MC < ATC

question

ATC rising

answer

MC > ATC

question

economies of scale

answer

the property whereby long-run average total cost falls as the quantity of output increases

question

diseconomies of scale

answer

the property whereby long-run average total cost rises as the quantity of output increases

question

profit maximization rules

answer

1. Marginal Revenue > Marginal Cost= Increase in Output (Q)

2.Marginal Revenue<Marginal Cost= Decrease in Output (Q)

3. Marginal Revenue=Marginal Cost = Profit Max Output (Q)

question

shutdown rule (short run)

answer

P<AVC
TR/Q < VC/Q
TR < VC

question

sunk cost

answer

a cost that has already been committed and cannot be recovered

question

exit rule (long run)

answer

TR/Q < VC/Q
P<ATC

1 of 27

question

industrial organization

answer

the study of how firms' decisions about prices and quantities depend on the market conditions they face

question

goal of a firm

answer

maximize profit

question

total revenue

answer

Price x Quantity (amount a firm receives for the sale of its output)

question

total cost

answer

fixed costs plus variable costs (market value of the inputs a firm uses in production); explicit + implicit

question

profit

answer

TR-TC

question

explicit costs

answer

input costs that require an outlay of money by the firm

question

implicit costs

answer

opportunity costs

question

economic profit

answer

TR - explicit - implicit

question

accounting profit

answer

TR - explicit

question

production function

answer

the relationship between quantity of inputs used to make a good and the quantity of output of that good

question

marginal product

answer

the increase in output that arises from an additional unit of input

question

diminishing marginal product

answer

the property whereby the marginal product of an input declines as the quantity of the input increases

question

fixed cost

answer

Costs that do not vary with the quantity of output produced; even is firm produces nothing, these costs still occur (rent)

question

variable cost

answer

a cost that varies with changes in the level of output; paper cups for coffee

question

average total cost

answer

TC/Q or AFC + AVC

question

average fixed cost

answer

FC/Q

question

average variable costt

answer

VC/Q

question

marginal cost

answer

change in TC/change in Q

question

efficient scale

answer

the quantity that minimizes ATC

question

ATC falling

answer

MC < ATC

question

ATC rising

answer

MC > ATC

question

economies of scale

answer

the property whereby long-run average total cost falls as the quantity of output increases

question

diseconomies of scale

answer

the property whereby long-run average total cost rises as the quantity of output increases

question

profit maximization rules

answer

1. Marginal Revenue > Marginal Cost= Increase in Output (Q)

2.Marginal Revenue<Marginal Cost= Decrease in Output (Q)

3. Marginal Revenue=Marginal Cost = Profit Max Output (Q)

question

shutdown rule (short run)

answer

P<AVC
TR/Q < VC/Q
TR < VC

question

sunk cost

answer

a cost that has already been committed and cannot be recovered

question

exit rule (long run)

answer

TR/Q < VC/Q
P<ATC

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