question
long run
answer
period of time in which all factor of production are variable
question
short run
answer
period of time in which one or more factors of production are held constant
question
explicit costs
answer
monetary costs
question
implicit costs
answer
opportunity costs
question
Profit
answer
Total Revenue - Total Cost
question
Total Revenue
answer
Price * Quantity
question
Economic Cost
answer
Explicit Cost + Implicit Cost
question
Accounting Profit
answer
Total Revenue - Explicit Cost
question
Economic Profit
answer
Total Revenue - Explicit Cost - Implicit Cost
question
Total Cost
answer
Total Fixed Cost + Total Variable Cost
question
Average Total Cost
answer
Average Fixed Cost + Average Variable Cost or Total Cost / Quantity
question
Average Fixed Cost
answer
Total Fixed Cost / Quantity
question
Average Variable Cost
answer
Total Variable Cost / Quantity
question
Marginal Cost
answer
Change in Total Cost / Change in Quantity or Change in Total Variable Cost / Change in Quantity
question
Coase Theorem
answer
If property rights are well defined and transaction costs are low then efficient outcome can be achieved without government intervention
question
When does a firm maximize profits?
answer
At quantity where marginal revenue equals marginal cost
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