Microeconomics Chapter 6 and 7 Test

0 min read

Posted on

May 24th, 2023

question

Average Fixed Cost

answer

For any output level is found by dividing total fixed cost by that amount of output: TFC/Q

question

Average Product

answer

Also Called labor productivity, is output per unit of labor input. total product/units of labor

question

Average Variable Cost

answer

TVC/ Quantity, for any output level is calculated by dividing total variable cost by that amount of output

question

Diseconomies of Scale

answer

The difficulty efficiently controlling and coordinating a firm's operations as it becomes a large scale producer

question

Economic Profit

answer

The result of subtracting all of your economic costs both explicit and implicit from revenue.

question

Economic Cost

answer

The payment that must be made to obtain and retain the services of a resource.

question

Economies of Scale

answer

As plant size increases a number of factors will for a time lead to lower average costs of production.

question

Explicit Cost

answer

The monetary payments it makes to those from whom it must purchase resources that it does not own

question

Implicit Cost

answer

The opportunity costs of using the resources that it already owns to make the firm's own product rather than selling those resources to outsiders for cash.

question

Fixed Cost

answer

Those costs that do not vary with changes in output; the cost of fixed resources

question

Fixed Resource

answer

Any resource whose quantity cannot be changed by a firm in the short run.

question

Income Effect

answer

A change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the product's price.

question

Law of Diminishing Marginal Utility

answer

The principle that as a consumer increases the consumption of a good or a service, the marginal utility obtained from each additional unit of the good or service decreases.

question

Law of Diminishing Returns

answer

The principle that as successive increments of a variable resource are added to a fixed resource, the marginal product of the variable resource will eventually decrease.

question

Long Run

answer

Time period long enough to alter or change all resources used.
-all possible short runs
-planning concept

question

Marginal Cost

answer

the extra or additional cost of producing one more unit of output. Change in TC/ Change in Q

question

Marginal Product

answer

The extra output or added associated with adding a unit of a variable resource, in this case labor, to the production process. Thus: change in total product/ change in labor input

question

Marginal Utility

answer

Is the extra satisfaction a consumer realizes from an additional unit of that product for example the 11th unit.

question

Normal Profit

answer

The payment made by a firm to obtain and retail entrepreneurial ability; the minimum income entrepreneurial ability must receive to induce it to perform entrepreneurial functions for a firm.

question

Opportunity Cost

answer

the loss of potential gain from other alternatives when one alternative is chosen.

question

Rational Behavior

answer

Human behavior based on comparison of marginal costs and marginal benefits; behavior designed to maximize total utility.

question

Short Run

answer

A time period too short to alter the amount of fixed resources but long enough to alter or change the amount of variable inputs.
-the fixed inputs or resources determine the plant size or capacity.

question

Total Cost

answer

The sum of fixed cost and variable cost

question

Total Product

answer

The total output of a particular good or service produced by a firm

question

Average total cost

answer

For any output level is found by dividing total cost by that output or by adding

question

Utility

answer

a measure of satisfaction

question

Utility Maximizing Rule

answer

To maximize satisfaction, the consumer should allocate his or her money income so that the last dollar spent on each product yields the same amount of extra marginal utility.

question

Variable Cost

answer

are those that change with the level of output

question

Variable Resource

answer

Any resource whose quantity can be changed by a firm in the short run.

1 of 29

question

Average Fixed Cost

answer

For any output level is found by dividing total fixed cost by that amount of output: TFC/Q

question

Average Product

answer

Also Called labor productivity, is output per unit of labor input. total product/units of labor

question

Average Variable Cost

answer

TVC/ Quantity, for any output level is calculated by dividing total variable cost by that amount of output

question

Diseconomies of Scale

answer

The difficulty efficiently controlling and coordinating a firm's operations as it becomes a large scale producer

question

Economic Profit

answer

The result of subtracting all of your economic costs both explicit and implicit from revenue.

question

Economic Cost

answer

The payment that must be made to obtain and retain the services of a resource.

question

Economies of Scale

answer

As plant size increases a number of factors will for a time lead to lower average costs of production.

question

Explicit Cost

answer

The monetary payments it makes to those from whom it must purchase resources that it does not own

question

Implicit Cost

answer

The opportunity costs of using the resources that it already owns to make the firm's own product rather than selling those resources to outsiders for cash.

question

Fixed Cost

answer

Those costs that do not vary with changes in output; the cost of fixed resources

question

Fixed Resource

answer

Any resource whose quantity cannot be changed by a firm in the short run.

question

Income Effect

answer

A change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the product's price.

question

Law of Diminishing Marginal Utility

answer

The principle that as a consumer increases the consumption of a good or a service, the marginal utility obtained from each additional unit of the good or service decreases.

question

Law of Diminishing Returns

answer

The principle that as successive increments of a variable resource are added to a fixed resource, the marginal product of the variable resource will eventually decrease.

question

Long Run

answer

Time period long enough to alter or change all resources used.
-all possible short runs
-planning concept

question

Marginal Cost

answer

the extra or additional cost of producing one more unit of output. Change in TC/ Change in Q

question

Marginal Product

answer

The extra output or added associated with adding a unit of a variable resource, in this case labor, to the production process. Thus: change in total product/ change in labor input

question

Marginal Utility

answer

Is the extra satisfaction a consumer realizes from an additional unit of that product for example the 11th unit.

question

Normal Profit

answer

The payment made by a firm to obtain and retail entrepreneurial ability; the minimum income entrepreneurial ability must receive to induce it to perform entrepreneurial functions for a firm.

question

Opportunity Cost

answer

the loss of potential gain from other alternatives when one alternative is chosen.

question

Rational Behavior

answer

Human behavior based on comparison of marginal costs and marginal benefits; behavior designed to maximize total utility.

question

Short Run

answer

A time period too short to alter the amount of fixed resources but long enough to alter or change the amount of variable inputs.
-the fixed inputs or resources determine the plant size or capacity.

question

Total Cost

answer

The sum of fixed cost and variable cost

question

Total Product

answer

The total output of a particular good or service produced by a firm

question

Average total cost

answer

For any output level is found by dividing total cost by that output or by adding

question

Utility

answer

a measure of satisfaction

question

Utility Maximizing Rule

answer

To maximize satisfaction, the consumer should allocate his or her money income so that the last dollar spent on each product yields the same amount of extra marginal utility.

question

Variable Cost

answer

are those that change with the level of output

question

Variable Resource

answer

Any resource whose quantity can be changed by a firm in the short run.

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order