question
marginal product
answer
the increase in output that arises from an additional unit of input
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production function
answer
the relationship between quantity of inputs and the quantity of output
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diminishing marginal product
answer
the property whereby the marginal product of an input declines as the quantity of the input increases
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Expicit costs
answer
seen by accountant
requires money
requires money
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implicit costs
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the opportunity cost
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total cost curve
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shows how total cost depends on the quantity of output
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TC=
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FC+TVC
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AVC=
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TVC/output
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AFC=
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FC/Q
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ATC=
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TC/Q
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marginal cost
answer
the cost of producing one more unit of a good
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Where MC and ATC intersect
answer
minimization point or efficient scale
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MC<ATC
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ATC is falling
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MC>ATC
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ATC is rising
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short run
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less flexibility
high costs
cost curve lies on or above long run cost curves
high costs
cost curve lies on or above long run cost curves
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long run
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flexible
curves much flatter
curves much flatter
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economies of scale
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factors that cause a producer's average cost per unit to fall as output rises (specialization)
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constant returns to scale
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the property whereby long-run average total cost stays the same as the quantity of output changes
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diseconomies of scale
answer
the property whereby long-run average total cost rises as the quantity of output increases
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