question
cost analysis
answer
total profit=total revenue-total cost
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explicit
answer
accounting costs, monetary costs, paid out of pocket, labor costs, raw materials"more direct costs"
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implicit
answer
opportunity costs, interests, wages , rent depriciation, what you already have and use house for business purposes, value economically, owners wage,
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accounting profit
answer
total revenue-explicit costs
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economic profit
answer
total revenue-explicit costs and implicit costs
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historical cost
answer
what you paid for your house initially
question
replacement cost
answer
cost it would take to replace the used car, already has depreciated, so it is not worth as much as it used to be
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sunk cost
answer
cost you have already put in you can't get back in the short term, rent , license fees, property tax, insurance
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economies of scale
answer
more units of output can be produced on a larger scale
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diseconomies of scale
answer
situation in which economies of scale no longer function for a firm, the firm experiences an increase in marginal wage cost when output increased excessively
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production function
answer
mathematical relationship between the mix of inputs and the level of output
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law of diminishing return
answer
return or marginal product is the increase in total output as a result of hiring one additional worker
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total revenue
answer
the amount a firm receives for the sale of its output
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total cost
answer
the market value of the inputs a firm uses in production
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profit
answer
total revenue-total cost
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marginal product
answer
the increase in output that arises from an additional unit of input
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diminishing marginal product
answer
the property whereby the marginal product of an input declines as the quantity of the input increases
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fixed cost
answer
costs that do not vary with quantity of output produced
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variable costs
answer
costs that vary with the quantity of output produced
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average total cost
answer
total cost divided by the quantity of output
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average fixed cost
answer
fixed cost divided by the quantity of output
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average variable cost
answer
variable cost divided by the quantity of output
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marginal cost
answer
the increase in total cost that arises from an extra unit of production
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efficient scale
answer
the quantity of output that minimizes average total cost
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constant returns to scale
answer
the property whereby long-run average total cost stays the same as the quantity of output changes
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