question
List and explain the four different types of competitive situations that a firm may face in the market
answer
-perfect competition:trying to sell identical products
-monopoly:one firm is selling it, no competition
-Monopolistic competition: many sell similar products, but not the same
-Oligopoly: few firms sell identical products.
-monopoly:one firm is selling it, no competition
-Monopolistic competition: many sell similar products, but not the same
-Oligopoly: few firms sell identical products.
question
What is the difference between explicit and implicit costs? Give an example of each.
answer
Explicit is costs that are out of pocket, implicit costs are using products that are already owned, Depreciation of goods.
question
Explain the concept of Marginal Product?
answer
-is the additional output of one more worker. To the more workers or labors you have the more product you get
-What it takes to create one more of your product
-What it takes to create one more of your product
question
Explain the Law of Diminishing Marginal Productivity and provide an example.
answer
general rule that as a firm employs more labor, eventually the amount of additional output produced declines
question
What are variable costs? What are some examples of variable costs?
answer
Variable costs are costs that change. Like extra things you didn't really need to buy or expect to buy. Like may be a gift for your pregnant worker.
question
What are fixed costs? What are some examples of fixed costs?
answer
They are costs that do not change, like the present of the building or paying your workers salaries.
question
Explain how average costs are calculated. How do average costs typically appear on a graph?
answer
They are calculated by dividing the number by the amount of product. They are U shaped on the graph.
question
What is the difference between short-run costs and long-run costs?
answer
Long run cost shows the lowest possible average cost of producing, allowing all the inputs to production to vary so that the firm is choosing its production technology. Short run shows the average total cost curve in the short run. Shows the total of the average fixed cost and average variable cost.
question
What are marginal costs? What are the total costs?
answer
The additional cost of producing one more unit of output. Total costs it fixed cots and varriavle costs together.
question
Explain the Economies of Scale concept.
answer
the situation where, as the quantity of output goes up, the cost per unit goes down. So when you are able to produce products after and buy materials in bulk, your price per unit goes down
question
differentiate between constant returns to scale and diseconomies of scale
answer
Constant returns to scales when expanding all inputs property does not changed the average cost of production. Diseconomies of scale the long-run average cost of producing each individual unit increasing as total output increases.
question
How do you find total revenue for a firm?
answer
you find it by subtracting your profits from your costs.
question
Is labor a variable cost? Why or why not?
answer
Yes, because the amount of labor you need changes.
question
How do fixed and variable costs play roles in economic decisions about future production and pricing?
answer
they play a role because they are trying to get these cots tot he lowest low they can in the future.
question
How do firms find their total costs?
answer
By adding there fixed and variable costs.
question
What is the difference between economic profit and accounting profit? Are they both important? Why or why not
answer
accounting profit includes explicit costs, where money is made. and economic is when money is normal lost, and total costs. They are both important in finding your financial situation and space.
question
What is economies of scale
answer
the long-run average cost of producing output decreases as total output increases
question
What is constant returns to scale
answer
expanding all inputs proportionately does not change the average cost of production
question
Example of an Explicit cost
answer
Renting a building
question
Example of Implicit cost
answer
Buying a dishwasher
question
Short-run costs deal with
answer
Some fixed some variable costs
question
Long-run costs deal with
answer
All variable costs
question
What is diseconomies of scale
answer
More you produce the more expensive it is to make
question
How do you calculate average costs
answer
divide the sum of variable costs and fixed costs by the quantity of units produced.
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