MICROECON 2.1 - Assignment Essays

MICROECON 2.1

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Posted on

March 14th, 2023

question

Average Total Cost (ATC)

answer

total costs divided by quantity of output

question

Average Variable Cost (AVC)

answer

total variable costs divided by quantity of output

question

Average-Marginal Rule

answer

When the marginal is above the average magnitude, the average rises; when the marginal is below the average, the average falls

question

Fixed Cost (FC)

answer

the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold

question

Marginal Cost (MC)

answer

the change in total costs associated with a one-unit change in output

question

Specialization of Labor

answer

Focusing work effort on a particular product or a single task

question

Diminishing marginal productivity/returns

answer

when an advantage is gained in a factor of production, the marginal productivity will typically diminish as production increases

question

Revenue

answer

the income that a firm receives from the sale of a good or service to its customers

question

short-run average cost (SRAC) curve

answer

the average total cost curve in the short term; shows the total of the average fixed costs and the average variable costs

question

Total Cost (TC)

answer

total fixed costs plus total variable costs

question

Variable Cost (VC)

answer

the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold

question

constant returns to scale

answer

when an increase in input results in a proportional increase in output

question

diseconomies of scale

answer

when the long-run average total cost rises as the quantity of output increases

question

economies of scale

answer

when the long-run average total cost falls as the quantity of output increases

question

long-run average cost curve (LRAC)

answer

a curve that shows the lowest cost at which a firm is able to produce a given quantity of output in the long run, when no inputs are fixed (planning curve)

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question

Average Total Cost (ATC)

answer

total costs divided by quantity of output

question

Average Variable Cost (AVC)

answer

total variable costs divided by quantity of output

question

Average-Marginal Rule

answer

When the marginal is above the average magnitude, the average rises; when the marginal is below the average, the average falls

question

Fixed Cost (FC)

answer

the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold

question

Marginal Cost (MC)

answer

the change in total costs associated with a one-unit change in output

question

Specialization of Labor

answer

Focusing work effort on a particular product or a single task

question

Diminishing marginal productivity/returns

answer

when an advantage is gained in a factor of production, the marginal productivity will typically diminish as production increases

question

Revenue

answer

the income that a firm receives from the sale of a good or service to its customers

question

short-run average cost (SRAC) curve

answer

the average total cost curve in the short term; shows the total of the average fixed costs and the average variable costs

question

Total Cost (TC)

answer

total fixed costs plus total variable costs

question

Variable Cost (VC)

answer

the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold

question

constant returns to scale

answer

when an increase in input results in a proportional increase in output

question

diseconomies of scale

answer

when the long-run average total cost rises as the quantity of output increases

question

economies of scale

answer

when the long-run average total cost falls as the quantity of output increases

question

long-run average cost curve (LRAC)

answer

a curve that shows the lowest cost at which a firm is able to produce a given quantity of output in the long run, when no inputs are fixed (planning curve)

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