ECON201 CHAPTER 8 - Assignment Essays

question

You're the manager of Caroline's Cookie Factory, what operation decisions do you need to make?

answer

Labor, capital, other inputs

question

goal of a firm

answer

maximize profit
-profit(loss)=total revenue - total cost

question

total revenue

answer

the amount a firm receives for the sale of its output

question

Equation for total revenue

answer

Price x Quantity

question

total cost

answer

amount a firm spends to produce and sell its outputs

question

Explicit cost

answer

input costs that require an outlay of money by the firm

question

implicit cost

answer

input costs that do not require an outlay of money by the firm

question

how to find economic costs

answer

explicit cost + implicit cost

question

Economic profit

answer

total revenue - (explicit + implicit costs)

question

How much should a firm produce

answer

describe the factors that determine output
- output; the product the firm creates
-factors of production (inputs); resources used in the production process
-LAND, LABOR, CAPITAL

question

Production function

answer

describes the relationship between the inputs used and out-put created
Ex. production of Caroline's cookie factory: assume that the size of the factory, capital, and so on is fixed

question

Marginal product

answer

the change in output associated with one additional unit of input

question

Marginal product of labor (MPL)

answer

change in output that arises from an additional worker

question

Marginal product of labor equation

answer

MPL= change in output divided by change in labor

question

diminishing marginal product

answer

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

question

when does diminishing marginal product occur

answer

when successive increases in inputs are associated with a slower rise in outputs
- as the amount of labor increases, MPL falls

question

short run

answer

period production in which at least one input is fixed

question

long run

answer

period of production in which all inputs are variable

question

Fixed costs

answer

Costs that do not vary with the quantity of output produced

question

variable cost (VC)

answer

costs that change with the quantity of output produced
-> TC=FC+Q

question

average total cost (ATC)

answer

total cost divided by the quantity of output; ATC=TC/Q

question

Average fixed cost (AFC)

answer

Fixed cost divided quantity of output
->AFC=FC/Q

question

Average variable cost (AVC)

answer

variable cost divided by the quantity of output
->AVC=VC/Q

question

Marginal cost (MC)

answer

change in total cost arising from producing one or more unit of output
->MC=2TC/Q

question

What does average total cost tell us

answer

the cost of a typical unit of output if total cost is divided evenly over all the units produced

question

What does marginal cost tell us

answer

the increase in total cost from producing an additional unit of output

question

Are costs both fixed and variables in short and long run?

answer

some costs are fixed in the short run, but all costs are variable in the long run

question

scale

answer

size of production process

question

after determining size of production

answer

firm must deal with the short run costs associated with that factory size

question

Efficient scale

answer

the level of output in which average total cost is minimized

question

what do long run costs reflect

answer

scale and the cost of providing additional output

question

can long run costs rise, fall, and stay the same

answer

yes

question

economies of scale

answer

long run average total cost FALLS as the quantity of output INCREASES
-GOAL

question

Constant returns to scale

answer

long run average total cost STAYS THE SAME as the quantity output changes

question

Diseconomies of scale

answer

long run average total cost RISES as the quantity of output INCREASES
-NOT GOAL

1 of 35

question

You're the manager of Caroline's Cookie Factory, what operation decisions do you need to make?

answer

Labor, capital, other inputs

question

goal of a firm

answer

maximize profit
-profit(loss)=total revenue - total cost

question

total revenue

answer

the amount a firm receives for the sale of its output

question

Equation for total revenue

answer

Price x Quantity

question

total cost

answer

amount a firm spends to produce and sell its outputs

question

Explicit cost

answer

input costs that require an outlay of money by the firm

question

implicit cost

answer

input costs that do not require an outlay of money by the firm

question

how to find economic costs

answer

explicit cost + implicit cost

question

Economic profit

answer

total revenue - (explicit + implicit costs)

question

How much should a firm produce

answer

describe the factors that determine output
- output; the product the firm creates
-factors of production (inputs); resources used in the production process
-LAND, LABOR, CAPITAL

question

Production function

answer

describes the relationship between the inputs used and out-put created
Ex. production of Caroline's cookie factory: assume that the size of the factory, capital, and so on is fixed

question

Marginal product

answer

the change in output associated with one additional unit of input

question

Marginal product of labor (MPL)

answer

change in output that arises from an additional worker

question

Marginal product of labor equation

answer

MPL= change in output divided by change in labor

question

diminishing marginal product

answer

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

question

when does diminishing marginal product occur

answer

when successive increases in inputs are associated with a slower rise in outputs
- as the amount of labor increases, MPL falls

question

short run

answer

period production in which at least one input is fixed

question

long run

answer

period of production in which all inputs are variable

question

Fixed costs

answer

Costs that do not vary with the quantity of output produced

question

variable cost (VC)

answer

costs that change with the quantity of output produced
-> TC=FC+Q

question

average total cost (ATC)

answer

total cost divided by the quantity of output; ATC=TC/Q

question

Average fixed cost (AFC)

answer

Fixed cost divided quantity of output
->AFC=FC/Q

question

Average variable cost (AVC)

answer

variable cost divided by the quantity of output
->AVC=VC/Q

question

Marginal cost (MC)

answer

change in total cost arising from producing one or more unit of output
->MC=2TC/Q

question

What does average total cost tell us

answer

the cost of a typical unit of output if total cost is divided evenly over all the units produced

question

What does marginal cost tell us

answer

the increase in total cost from producing an additional unit of output

question

Are costs both fixed and variables in short and long run?

answer

some costs are fixed in the short run, but all costs are variable in the long run

question

scale

answer

size of production process

question

after determining size of production

answer

firm must deal with the short run costs associated with that factory size

question

Efficient scale

answer

the level of output in which average total cost is minimized

question

what do long run costs reflect

answer

scale and the cost of providing additional output

question

can long run costs rise, fall, and stay the same

answer

yes

question

economies of scale

answer

long run average total cost FALLS as the quantity of output INCREASES
-GOAL

question

Constant returns to scale

answer

long run average total cost STAYS THE SAME as the quantity output changes

question

Diseconomies of scale

answer

long run average total cost RISES as the quantity of output INCREASES
-NOT GOAL

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order