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Chapter 10 Vocab
Chapter 10
13
Business
Undergraduate 1
03/14/2009

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Term
Constant returns to scale
Definition
Where long-run average total costs do not change with an increase in output.
Term
Depreciation
Definition
A measure of the decline in value of an asset that occurs over time.
Term
Diseconomies of scale
Definition
When a long-run average total costs increase as ouput increases
Term
Economically efficient
Definition
The method that produces a given level of output at the lowest possible cost.
Term
Economies of scope
Definition
When the costs of producing products are interdependent so that it's less costly for a firm to produce one good whne it's already producing another.
Term
Entrepreneur
Definition
An individual who sees an opportunity to sell an item at a higher price than the average cost of producing.
Term
Indivisible setup cost
Definition
The cost of indivisible input for which a certain minimum amount of production must be undertaken before the input becomes economically feasible
Term
Learning by doing
Definition
As we do something, we learn what works and what doesn't, and over time we become proficient at it.
Term
Minimum efficient level of production
Definition
Amount of production that spreads setup costs out sufficiently for a firm to undertake production profitably
Term
Monitoring cost
Definition
Costs incurred by the organizer of production in seeing to it that the employees do what they're supposed to do.
Term
Team spirit
Definition
The feelings of friendship and being part of a team that bring out people's best efforts
Term
Technical efficiency
Definition
As few inputs as possible tare used to produce a given output
Term
Technological change
Definition
An increase in the range of production techniques that lead to more efficient ways of producing goods as well as the production of new and better goods.
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