Details Title: CHAP 10 ECON 2020 Description: Final Exam Flashcards Total Flash Cards: 27 Created: 05/04/2009 15:22:59		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Economics Flashcards
Cards in this set: Term Technology Definition The processes a firm uses to turn inputs into outputs of goods and services. Term Technological Change Definition A change in the ability of a firm to produce a given level of output with a given quantity of inputs. Term Short Run Definition The period of time during which at least one of a firm's inputs is fixed. Term Long Run Definition The period of time in which a firm can vary all of its inputs, adopt new technology, and increase or decrease the size of its physical plant. Term Total Cost Definition The cost of all the inputs a firm uses in production. Term Variable Costs Definition Costs that can change as output changes. Term Fixed Costs Definition Costs that remain constant as output changes. Term Opportunity Cost Definition The highest valued alternative that must be given up to engage in an activity. Term Explicit Cost Definition A cost that involves spending money. Term Implicit Cost Definition A non-monetary opportunity cost. Term Production Function Definition The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs. Term Average Total Cost Definition Total cost divided by the quantity of output produced. Term Marginal Product of Labor Definition The additional output a firm produces as a result of hiring one more worker. Term Law of Diminishing Returns Definition The principle that, at some point, adding more of a variable input, such as labor, to the same amount of a fixed input, such as capital, will casue the marginal product of the variable input to decline. Term Average Product of Labor Definition The total output produced by a firm divided by the quantity of workers. Term Marginal Cost Definition The change in a firm's total cost from producing one more unit of a good or service. Term Marginal Cost (formula) Definition MC=(change in TC/change in Q) Term Average Fixed Cost Definition Fixed cost divided by the quantity of output produced. Term Average Variable Cost Definition Variable cost divided by the quantity of output produced. Term Long-run Average Cost Curve Definition A curve showing 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. Term Economies of Scale Definition The situation when a firm's long run average costs fall as it increases output. Term Constant Returns to Scale Definition The situation when a firm's long-run average costs remain unchanged as it increases output. Term Minimum Efficient Scale Definition The level of output at which all economies of scale are exhausted. Term Diseconomies of Scale Definition The situation when a firm's long-run average costs rise as the firm increases output. Term Marginal Rate of Technical Substitution (MRTS) Definition The slope of an isoquant, or the rate at which a firm is able to substitute one input for another while keeping the level of output constant. Term Isoquant Definition A curve that shows all the combinations of two inputs, such as capital and labor, that will produce the same level of output. Term Isocost Line Definition All the combinations of two inputs, such as capital and labor, and have the same total cost.