question
The long run exists when all input costs are?
answer
Variable
question
Why is AVC U-Shaped?
answer
At low levels of output, marginal productivity is rising
question
What is ATC when output=150, AFC= 25, and AVC= 50?
answer
75. ATC= AFC+AVC
question
What costs are part of the simple existence of a firm's plant, that must be paid when output is zero?
answer
Fixed Costs
question
When marginal product is at its maximum, marginal costs...?
answer
Begin rising with additional output produced
question
What is AP when output=30 and Labor=3?
answer
10. AP=O/L
question
What is total cost when output=10, TFC=50, and TVC= 75?
answer
125. TC= TFC + TVC
question
What product is zero when total product is at a maximum?
answer
marginal product
question
What is Average Product of Labor (AP)?
answer
The output produced/ number of workers
question
What is calculation for Average Variable Costs?
answer
TVC/Q
question
Managers can alter_______ cost in short run, but _______ costs are beyond a manager's control and must be paid regardless of the output level?
answer
Variable.
Fixed.
Fixed.
question
What types of resources that require more time for firm to adjust, given a change in demand?
answer
Size of factory.
Amount of Machinery.
Amount of Machinery.
question
How does total variable cost (TVC) move in relation to output?
answer
Directly
question
What profit remains after a firm has paid explicit costs?
answer
Accounting Profit
question
As more of a variable input is added, eventually the additional output one gets from that additional input will because of...?
answer
Diminishing Marginal Productivity
question
The amount a firm receives from selling its product or service plus any increase in the value of the assets owned by the firm is?
answer
Total Revenue (TR)
question
What costs are the firm's oppourtunity cost of the factors of production provided by the owner's of the firm?
answer
Implicit Costs
question
What costs are intangible and NOT obvious costs associated with using self-owned resources?
answer
Implicit Costs
question
Variable costs are those that...?
answer
Change with the level of output
question
What is the calculation of Average Fixed Costs (AFtC)
answer
FC/Q or ATC-AVC
question
What is the calculation for Average Total Costs (ATC)
answer
TC/Q or AFC+AVC or [(TFC+TVC)/Q]
question
Calculation of Marginal Costs
answer
Change in Total Variable Cost/ Change in ouput
question
What costs are the monetary payments a firm makes to those who provide the factors/inputs to production
answer
Explicit Costs
question
When is Marginal Cost [MC] at its minimum level?
answer
When Marginal Product [MP] is at its maximum
question
The difference between total costs and average per-unit costs are?
answer
average costs measure the cost to produce each unit from the total quantity produced by dividing total costs by total output AND total costs are the sum of fixed and variable costs and measure the full cost of producing total output.
question
the difference between average costs/unit and marginal costs/unit is?
answer
MC=^TC/^Q
AC=TC/Q
AC=TC/Q
question
What product is maximized when it is equal to marginal product?
answer
Average Product
question
which resources can a firm quickly and easily adjust?
answer
fuel, raw materials, hourly labor
question
Average total costs are pulled upward when____ rises above average total costs.
answer
Marginal Costs
question
what does the vertical distance between the average total cost and the average variable cost curves measure?
answer
Average Fixed Cost at a specific level of output
question
How is the ATC determined from graphical information?
answer
BY adding vertically the average fixed cost and average variable cost curves
question
what two words describe when consumers should spend money on goods that give them the most marginal utility?
answer
Rational Choice
question
As you consume more of a good, after some point, the additional satisfaction received decreases with additional units due to...?
answer
Diminishing Marginal Utility
question
"Follow the Leader" and "You get what you pay for" are two rules of thumb of...?
answer
Bounded Rationality
question
The consumer's ability to buy a particular product because of its relative expensiveness to similar products is due to...?
answer
Substitution Effect
question
Game where the first person decides how to divide the prize, and if the second person does not accept, neither one gets anything.
answer
Ultimatum
question
Decisions are costless, individuals maximize utility, and preferences are given are examples of
answer
Theory of Rational Choice
question
What kind of people prefer more to less and seek as much satisfaction as possible
answer
Rational Consumers
question
What equilibrea come from "Follow the Leader" rule of thumb.
answer
Focal Point
question
When you buy an item with low satisfaction just to show you bought it off to your friends is an example of...?
answer
Conspicuous Consumption
question
Substitution Effect contributes to the _____ relationship between price and quantity demanded shown on the demand curve
answer
Inverse
question
Marginal Utility/price is equal and consumers are maximizing total satisfaction when under the...?
answer
Utility Maximizing Rule
question
if Marginal Utility/Price of good x is less than the Marginal Utility of good y, then...?
answer
the opportunity cost of not consuming good y is greater than the opportunity cost of not consuming good x.
question
A demand curve can be derived by changing the price of one product and then adjusting how much is consumed to satisfy the..?
answer
Utility Maximization Rule
question
What is determined by our nature and also by our experiences and society?
answer
Tastes and Preferences
question
When Marginal Utility is negative, when additional units are consumed, what happens to total utility?
answer
it starts falling
question
A decrease in the price of one product ______ the MU/P spent on it, consumers will then buy more of it
answer
raises
question
Price must fall in order for quantity demanded to increase because of the...?
answer
Law of Diminishing Marginal Utility
question
A what type of market has economic forces that operate unimpeded?
answer
Perfectly Competitive
question
Marginal revenue is the _____ in total revenue that is associated with changes in ______
answer
changes.
output.
output.
question
what competition is said to be rare in the real world?
answer
Pure Competition
question
the point where AVC=P on a graph, the firm is better off to close then keep going?
answer
Shutdown Point
question
A perfectly competitive firm can maximize its economic profit only by adjusting its output because..?
answer
it is a price taker
question
What are the necessary conditions for a perfect competition?
answer
Products are identical.
Very large number of firms.
Very large number of firms.
question
If market price initially exceeds minimum average total costs, the resulting economic profits will attract new firms to the industry eventually resulting in
answer
industry expansion that increases supply until prices equals minimum ATC
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