question
maximize profit
answer
The goal of a firm is to....
question
total revenue - total cost
answer
Profit =
question
opportunity costs
answer
economic costs =
question
opportunity costs
answer
the firm's total costs is measured as the ___________ of all inputs used to produce a good
question
total cost
answer
the _________ of producing is measured as the market value of the firm's inputs
question
explicit costs + implicit costs
answer
total costs =
question
financial capital
answer
the cost of _____________ is an important component of a firm's cost
question
accounting
answer
_________ profit tends to be higher than economic profit
question
explicit costs
answer
accounting costs only include _______
question
implicit costs, explicit costs
answer
economic costs include
question
transactions
answer
accountants only track
question
short run
answer
the time frame in which some inputs are fixed
question
labor
answer
_________ is the only input that can be easily adjusted in the short run
question
capital
answer
in the short run assume _______ is fixed
question
short run
answer
the firm can only adjust the quantity of the good in the _______ by decreasing or increasing labor
question
long run
answer
the time frame in which all inputs are variable
question
capital
answer
in the long run: ________ and all other inputs can vary with outputs
question
production function
answer
a graph showing the relationship between the quantity of output of the good, while holding other inputs constant
question
marginal product
answer
the increase in output from an additional unit of an input - production resource
question
change in quantity of a good/ change in labor
answer
what is the formula for marginal product
question
increases
answer
MP diminishes as the quantity of the input _______
question
flatter
answer
production function gets _________ with additional unit
question
decreases
answer
when the production function gets flatter due to additional unit, the slope _________
question
cost
answer
Someone should add the additional unit if the profit exceeds the ____
question
fixed output
answer
capital =
question
marginal cost
answer
the increase in total cost due to an additional unit produced
question
fixed cost + variable costs
answer
short run =
question
fixed costs
answer
costs that do not vary with quantity of output produced
question
variable costs
answer
costs that vary with the quantity of output produced
question
fixed
answer
cost of ovens is a _______ cost
question
variable
answer
cost of labor is a ______ cost
question
fixed costs + variable costs
answer
total cost =
question
fixed cost / quantity
answer
Average fixed cost (AFC) =
question
Variable cost/ Quantity
answer
Average variable costs (AVC)=
question
Total costs/ Quantity
answer
Average total costs (ATC)
question
average fixed cost + average variable cost
answer
average total cost =
question
falling
answer
When MC is below ATC, ATC is
question
rising
answer
When MC is above ATC, ATC is
question
minimum ATC
answer
MC and ATC intersect at the _____________ costs in the long run
question
fixed costs
answer
in the short run, firms must incur ________
question
variable
answer
in the long run, all costs become
question
labor and capital
answer
the firm can utilize most efficiently with a mix of
question
Long-run ATC
answer
shows the lowest ATC possible at each Quantity when firm has the time to change labor and capital
question
lowest ATC
answer
Long-run ATC shows the __________ possible at each Quantity when firm has the time to change labor and capital
question
plant size
answer
In the Long run, firms have many possibilities when choosing _______, each with its own short run ATC
question
ATC falls as Q increases
answer
economies of scales
question
ATC remains constant as Q increases
answer
constant returns to scale
question
ATC rises as Q rises
answer
diseconomies of Scale
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