Term
| what are the types of production inputs |
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Definition
variable input-(the papers need for the class, varies with number of students)
fixed input-(the electricity used)
short run encounters both inputs, long run encounters only variable inputs |
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Term
| what are the two production periods |
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Definition
short-run--encounters fixed and variable inputs-(vary as quantity changes)
long run-only one input, variable inputs |
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Term
| TC (total cost) for short run |
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Definition
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Term
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Definition
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Term
| types of TP (total profit) |
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Definition
accounting profit (AP)
AP= TR-TC (this is explicit cost only, what is paid)
economic profit (EP)
EP= TR-TEC-TIC or EP= AP-TIC |
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Term
| what is TIC-total implicit cost |
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Definition
| foregone income, example" what you would make working for someone else |
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Term
| when would you remain in this business |
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Definition
| when EP-economic profit is greater than zero |
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Term
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Definition
| when EP (economic profit) is zero, undecided whether or not to stay in the business |
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Term
| what is MC (marginal cost) and the equation for it |
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Definition
the additional cost incurred as a result of producing one more unit
change in TC divided by change in quantity |
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