EC201 exam 3

question

total cost

answer

FC + VC

question

marginal cost

answer

change in TC/ change in Q

question

average total cost

answer

TC / Q

question

average fixed cost

answer

FC / Q

question

average variable cost

answer

VC / Q

question

implicit cost

answer

a nonmonetary opportunity cost

question

explicit cost

answer

a cost that involves spending money

question

economic opportunity cost

answer

include both explicit and implicit costs

question

fixed cost

answer

costs that remain constant as a firms level of output changes

question

variable cost

answer

costs that change as a firms level of output changes

question

marginal product of labor

answer

change in Q / change in labor

question

division of labor & specialization

answer

with initial hires, specialization can facilitate an increase in MP (marginal production)

question

law of diminishing returns

answer

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

question

short run always takes what shape?

answer

question

marginal cost curve

answer

"j shape"

question

average fixed cost curve (AFC)

answer

"ski slope" always going down

question

average total cost curve (ATC)

answer

"u shape" above and to the right of AVC curve

question

short run

answer

the period of time during which at least one of a firms inputs is fixed (ex. capital)

question

long run

answer

the period of time in which a firm can vary all its inputs, adopt new technology, and increase or decrease the size of its physical plant

question

production function

answer

the relationship between the inputs employed by a firm and the maximum output it can produce with those inputs

question

economies of scale

answer

the situation when a firms long run average costs fall as it increases the quantity of output it produces

question

minimum efficient scale

answer

the level of output at which all economies of scale are exhausted

question

constant returns to scale

answer

the situation in which a firms long-run average costs remain unchanged as it increases output

question

diseconomies of scale

answer

the situation in which a firms long run average costs rise as the firm increases output

question

marginal cost curve and ATC curve intersect where?

answer

at minimum point on ATC curve

1 of 25

question

total cost

answer

FC + VC

question

marginal cost

answer

change in TC/ change in Q

question

average total cost

answer

TC / Q

question

average fixed cost

answer

FC / Q

question

average variable cost

answer

VC / Q

question

implicit cost

answer

a nonmonetary opportunity cost

question

explicit cost

answer

a cost that involves spending money

question

economic opportunity cost

answer

include both explicit and implicit costs

question

fixed cost

answer

costs that remain constant as a firms level of output changes

question

variable cost

answer

costs that change as a firms level of output changes

question

marginal product of labor

answer

change in Q / change in labor

question

division of labor & specialization

answer

with initial hires, specialization can facilitate an increase in MP (marginal production)

question

law of diminishing returns

answer

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

question

short run always takes what shape?

answer

question

marginal cost curve

answer

"j shape"

question

average fixed cost curve (AFC)

answer

"ski slope" always going down

question

average total cost curve (ATC)

answer

"u shape" above and to the right of AVC curve

question

short run

answer

the period of time during which at least one of a firms inputs is fixed (ex. capital)

question

long run

answer

the period of time in which a firm can vary all its inputs, adopt new technology, and increase or decrease the size of its physical plant

question

production function

answer

the relationship between the inputs employed by a firm and the maximum output it can produce with those inputs

question

economies of scale

answer

the situation when a firms long run average costs fall as it increases the quantity of output it produces

question

minimum efficient scale

answer

the level of output at which all economies of scale are exhausted

question

constant returns to scale

answer

the situation in which a firms long-run average costs remain unchanged as it increases output

question

diseconomies of scale

answer

the situation in which a firms long run average costs rise as the firm increases output

question

marginal cost curve and ATC curve intersect where?

answer

at minimum point on ATC curve

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EC201 exam 3

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