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memorize.ai (lvl 286)

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Section 1

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Explicit cost

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6 years ago

Date created

Mar 1, 2020

Cards (23)

Section 1

(23 cards)

Explicit cost

Front

A cost that involves spending money

Back

Technology

Front

The processes a firm uses to turn inputs into outputs of goods and services

Back

Variable costs

Front

costs that change as output changes

Back

minimum efficient scale

Front

The lowest level of output at which all economies of scale are exhausted

Back

long run

Front

the firm can vary all of its inputs, adopt new technology, and increase or decrease the size of its physical plant

Back

diseconomies of scale

Front

a situation in which a firm's long-run average costs rise as the firm increases output

Back

Fixed costs

Front

costs that remain constant as output changes

Back

marginal product of labor

Front

the additional output a firm produces as a result of hiring one more worker

Back

average total cost

Front

low levels of production, the average cost falls as the number of pizzas rises; at higher levels, the average cost rises as the number of pizzas rises.

Back

Economic costs of production differ from accounting costs in that

Front

economic costs add the opportunity costs of a firm using its own resources while accounting costs do not

Back

Total cost

Front

is the cost of all the inputs a firm uses in production

Back

average product of labor

Front

calculated as the total output produced by a firm divided by the quantity of workers

Back

economies of scale

Front

the firm's long-run average costs falling as it increases the quantity of output it produces

Back

the difference between "diminishing marginal returns" and "diseconomies of scale"?

Front

Diminishing marginal returns, which applies only in the short run when at least one factor is fixed, explains why marginal cost increases, while diseconomies of scale, which applies in the long run when all factors are variable, explains why average cost increases

Back

law of diminishing marginal returns states

Front

that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline

Back

Implicit cost

Front

A non-monetary opportunity cost

Back

Law of diminishing returns

Front

At some point, adding more of a variable input, such as labor, to the same amount of a fixed input, such as capital, will cause the marginal product of the variable input to decline

Back

marginal cost

Front

as the change in a firm's total cost from producing one more unit of a good or serv

Back

Technological change

Front

A change in the ability of a firm to produce a given level of output with a given quantity of inputs.

Back

long-run average cost curve

Front

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.

Back

costs in the long run

Front

all of a firm's costs are variable, since the long run is a sufficiently long time to alter the level of any input

Back

short run

Front

as a period of time during which at least one of a firm's inputs is fixed

Back

what causes average total cost u shaped curve

Front

falling-then-rising" nature of average total costs results in a U-shaped average total cost curve

Back