Econ section 10 - Custom Scholars
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Econ section 10

question
explicit costs
answer
Involve a direct payment of cash
question
implicit costs
answer
Involve no outlay of money, represents the inflows of cash
question
accounting profit
answer
A firm's total revenue minus its explicit costs
question
economic profit
answer
a firm's total revenue minus its explicit and implicit costs
question
implicit cost of capital
answer
Opportunity costs of the capital
question
normal profit
answer
Profit just high enough to keep a firm engaged
question
marginal revenue
answer
the change in total revenue from an additional unit sold (change TR/ change quantity)
question
optimal output rule
answer
Profit is maximized MR=MC
question
marginal cost curve
answer
a graphical representation showing how the cost of producing one more unit depends on the quantity that has already been produced
question
Marginal revenue curve
answer
a graphical representation showing how marginal revenue varies as output varies.
question
production function
answer
The quantity of output a firm produces depends on the quantity of inputs
question
fixed input
answer
an input whose quantity is fixed for a period of time and cannot be varied
question
variable input
answer
an input whose quantity the firm can vary at any time
question
long run
answer
the time period in which all inputs can be varied (break even)
question
short run
answer
the time period in which at least one input is fixed (increase/decrease)
question
total product curve
answer
shows how the quantity of output depends on the quantity of the variable input, for a given quantity of the fixed input
question
marginal product
answer
The additional quantity of output from using one more unit of labor
question
diminishing returns to an input
answer
when an increase in the quantity of that input, holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input
question
fixed costs
answer
Cost that does not depend on quantity of output produced
question
total cost curve
answer
a graphical representation that shows how total costs depend on the quantity of output
question
average total cost
answer
total cost divided by the quantity of output
question
U-shaped average total cost curve
answer
Graph that falls at low levels of output, then rises at higher levels
question
Average Fixed Cost (AFC)
answer
fixed cost divided by the quantity of output
question
Average Variable Cost (AVC)
answer
total variable costs divided by quantity of output
question
The minimum-cost output
answer
The quantity of output at which the marginal cost curve crosses the average total cost curve from below
question
long-run average total cost curve
answer
The relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output
question
Increasing returns to scale
answer
when output increases more than in proportion to an increase in all inputs
question
Economies of sale
answer
when long-run average total cost declines as output increases
question
decreasing returns to scale
answer
when output increases less than in proportion to an increase in all inputs
question
diseconomies of scale
answer
when long-run average total cost increases as output increases
question
constant returns to scale
answer
when output increases directly in proportion to an increase in all inputs
question
sunk cost
answer
a cost that has already been paid and cannot be recovered
question
price-taking producer
answer
a producer whose actions have no effect on the market price of the good or service it sells
question
price-taking consumer
answer
is a consumer whose actions have no effect on the market price of the good or service he or she buys
question
perfectly competitive market
answer
all market participants are price-takers
question
perfectly competitive industry
answer
an industry in which firms are price-takers
question
market share
answer
the portion of a market controlled by a particular company or product.
question
standardized product
answer
a product that consumers consider identical in all essential features to other products in the same market
question
variable cost
answer
a cost that varies with changes in the level of output
question
total cost
answer
fixed costs plus variable costs
question
Monopolist
answer
A firm that is the only producer of a good
question
Monopoly
answer
an industry controlled by a monopolist
question
Barrier to entry
answer
Something that keeps other from going into the same business
question
natural monopoly
answer
A monopoly created and sustained by economics of scale
question
patent
answer
gives the inventor the sole right to make, use, or sell that invention
question
commodity
answer
valuable product
question
free entry and exit
answer
when there are no obstacles to entry into or exit from an industry
question
oligopolist
answer
Producer in an oligopoly market
question
Oligopoly
answer
An industry with only a few firms
question
Imperfect competition
answer
When firms compete but also posses market power
question
monopolistic competition
answer
a market structure in which many firms sell products that are similar but not identical
question
Copyright
answer
gives the creator of a literary or artistic work sole rights to profit from that work
1 of 52
question
explicit costs
answer
Involve a direct payment of cash
question
implicit costs
answer
Involve no outlay of money, represents the inflows of cash
question
accounting profit
answer
A firm's total revenue minus its explicit costs
question
economic profit
answer
a firm's total revenue minus its explicit and implicit costs
question
implicit cost of capital
answer
Opportunity costs of the capital
question
normal profit
answer
Profit just high enough to keep a firm engaged
question
marginal revenue
answer
the change in total revenue from an additional unit sold (change TR/ change quantity)
question
optimal output rule
answer
Profit is maximized MR=MC
question
marginal cost curve
answer
a graphical representation showing how the cost of producing one more unit depends on the quantity that has already been produced
question
Marginal revenue curve
answer
a graphical representation showing how marginal revenue varies as output varies.
question
production function
answer
The quantity of output a firm produces depends on the quantity of inputs
question
fixed input
answer
an input whose quantity is fixed for a period of time and cannot be varied
question
variable input
answer
an input whose quantity the firm can vary at any time
question
long run
answer
the time period in which all inputs can be varied (break even)
question
short run
answer
the time period in which at least one input is fixed (increase/decrease)
question
total product curve
answer
shows how the quantity of output depends on the quantity of the variable input, for a given quantity of the fixed input
question
marginal product
answer
The additional quantity of output from using one more unit of labor
question
diminishing returns to an input
answer
when an increase in the quantity of that input, holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input
question
fixed costs
answer
Cost that does not depend on quantity of output produced
question
total cost curve
answer
a graphical representation that shows how total costs depend on the quantity of output
question
average total cost
answer
total cost divided by the quantity of output
question
U-shaped average total cost curve
answer
Graph that falls at low levels of output, then rises at higher levels
question
Average Fixed Cost (AFC)
answer
fixed cost divided by the quantity of output
question
Average Variable Cost (AVC)
answer
total variable costs divided by quantity of output
question
The minimum-cost output
answer
The quantity of output at which the marginal cost curve crosses the average total cost curve from below
question
long-run average total cost curve
answer
The relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output
question
Increasing returns to scale
answer
when output increases more than in proportion to an increase in all inputs
question
Economies of sale
answer
when long-run average total cost declines as output increases
question
decreasing returns to scale
answer
when output increases less than in proportion to an increase in all inputs
question
diseconomies of scale
answer
when long-run average total cost increases as output increases
question
constant returns to scale
answer
when output increases directly in proportion to an increase in all inputs
question
sunk cost
answer
a cost that has already been paid and cannot be recovered
question
price-taking producer
answer
a producer whose actions have no effect on the market price of the good or service it sells
question
price-taking consumer
answer
is a consumer whose actions have no effect on the market price of the good or service he or she buys
question
perfectly competitive market
answer
all market participants are price-takers
question
perfectly competitive industry
answer
an industry in which firms are price-takers
question
market share
answer
the portion of a market controlled by a particular company or product.
question
standardized product
answer
a product that consumers consider identical in all essential features to other products in the same market
question
variable cost
answer
a cost that varies with changes in the level of output
question
total cost
answer
fixed costs plus variable costs
question
Monopolist
answer
A firm that is the only producer of a good
question
Monopoly
answer
an industry controlled by a monopolist
question
Barrier to entry
answer
Something that keeps other from going into the same business
question
natural monopoly
answer
A monopoly created and sustained by economics of scale
question
patent
answer
gives the inventor the sole right to make, use, or sell that invention
question
commodity
answer
valuable product
question
free entry and exit
answer
when there are no obstacles to entry into or exit from an industry
question
oligopolist
answer
Producer in an oligopoly market
question
Oligopoly
answer
An industry with only a few firms
question
Imperfect competition
answer
When firms compete but also posses market power
question
monopolistic competition
answer
a market structure in which many firms sell products that are similar but not identical
question
Copyright
answer
gives the creator of a literary or artistic work sole rights to profit from that work

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