Econ Production (Unit 3)

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Posted on

March 14th, 2023

question

Allocative Efficiency

answer

producers selling product at MR=MC (lowest they are willing to sell, benefiting consumers)

question

Anticipated Economic Losses

answer

firms can anticipate economic loss in the short run when first entering the market, that they'll make up for in the long run

question

Average Product

answer

total output divided by a certain input

question

Barriers to Entry

answer

reasons to not enter the market even when firms are making a profit

question

Constant Returns to Scale

answer

slope of LRATC curve is zero, which is where firms want to produce because it is the lowest cost

question

Constant Cost Markets

answer

cost of good remains constant even when output changes (shift of both supply and demand curves)

question

Decision to Produce (or Not)

answer

TR>VC: produce

question

Diminishing Returns (Stage of Production)

answer

total product slope increases at slower rate, marginal product slope decreases

question

Diminishing Returns to Scale

answer

output increases at a slower rate than inputs

question

Diseconomies of Scale

answer

LRATC curve has a positive slope (get bigger = more expensive)

question

Division of Labor

answer

give each worker a specific task

question

Economies of Scale

answer

LRATC curve has a negative slope (get big = less expensive)

question

Factors of Production

answer

resources to produce good (labor, capital, etc.)

question

Increasing Cost Markets

answer

cost of inputs rises as more and more firms enter a profitable market, causing costs to increase due to an increase in demand for inputs

question

Increasing Returns (Stage of Production)

answer

marginal product, total product, and average product all have positive slopes (each additional input has increasing output)

question

Increasing Returns to Scale

answer

output increases at faster rates than all inputs

question

Law of Diminishing Marginal Returns

answer

after a certain point, additional inputs will cause outputs to decrease (too many cooks in the kitchen)

question

Marginal Product

answer

how many more products are produced from another input

question

Minimum Efficient Scale

answer

optimal spot to produce (constant returns)

question

Negative Returns (Stage of Production)

answer

marginal product is negative, all slopes are decreasing

question

Productive Efficiency

answer

conditions to have lowest possible cost (use inputs wisely)

question

Production Function

answer

outputs vs. inputs graphed (MP, AP, TP)

question

Scales of Production

answer

economies of scale, diseconomies of scale, constant returns (LRATCC)

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question

Allocative Efficiency

answer

producers selling product at MR=MC (lowest they are willing to sell, benefiting consumers)

question

Anticipated Economic Losses

answer

firms can anticipate economic loss in the short run when first entering the market, that they'll make up for in the long run

question

Average Product

answer

total output divided by a certain input

question

Barriers to Entry

answer

reasons to not enter the market even when firms are making a profit

question

Constant Returns to Scale

answer

slope of LRATC curve is zero, which is where firms want to produce because it is the lowest cost

question

Constant Cost Markets

answer

cost of good remains constant even when output changes (shift of both supply and demand curves)

question

Decision to Produce (or Not)

answer

TR>VC: produce

question

Diminishing Returns (Stage of Production)

answer

total product slope increases at slower rate, marginal product slope decreases

question

Diminishing Returns to Scale

answer

output increases at a slower rate than inputs

question

Diseconomies of Scale

answer

LRATC curve has a positive slope (get bigger = more expensive)

question

Division of Labor

answer

give each worker a specific task

question

Economies of Scale

answer

LRATC curve has a negative slope (get big = less expensive)

question

Factors of Production

answer

resources to produce good (labor, capital, etc.)

question

Increasing Cost Markets

answer

cost of inputs rises as more and more firms enter a profitable market, causing costs to increase due to an increase in demand for inputs

question

Increasing Returns (Stage of Production)

answer

marginal product, total product, and average product all have positive slopes (each additional input has increasing output)

question

Increasing Returns to Scale

answer

output increases at faster rates than all inputs

question

Law of Diminishing Marginal Returns

answer

after a certain point, additional inputs will cause outputs to decrease (too many cooks in the kitchen)

question

Marginal Product

answer

how many more products are produced from another input

question

Minimum Efficient Scale

answer

optimal spot to produce (constant returns)

question

Negative Returns (Stage of Production)

answer

marginal product is negative, all slopes are decreasing

question

Productive Efficiency

answer

conditions to have lowest possible cost (use inputs wisely)

question

Production Function

answer

outputs vs. inputs graphed (MP, AP, TP)

question

Scales of Production

answer

economies of scale, diseconomies of scale, constant returns (LRATCC)

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