Term
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Definition
| Total revenue minus economic cost |
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Term
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Definition
| The oppurtunity cost of the inputs used in the production process, equal to explicit cost plus implicit cost |
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Term
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Definition
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Term
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Definition
| An oppurtunity cost that does not involve a monetary payment |
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Term
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Definition
| The explicit costs of production |
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Term
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Definition
| Total revenue minus accounting cost |
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Term
| Marginal Product of labor |
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Definition
| the change in output from one additional unit of labor |
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Term
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Definition
| As one input increases while the other inputs are held fixed, output increases at a deacreasing rate |
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Term
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Definition
| a curve showing the relationship between the quantity of labor and the quantity of ouput produced, ceteris paribus |
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Term
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Definition
| Cost that does not vary with the quatity produced |
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Term
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Definition
| cost that varies with the quantity produced |
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Term
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Definition
| the total cost of production when at least one input is fixed; equal to fixed cost plus variable cost |
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Term
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Definition
| Fixed Cost divided by the quantity produced |
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Term
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Definition
| Variable cost divided by the quantity produced |
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Term
| short run average total cost |
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Definition
| short-run total cost divided by the quantity produced; equal to AFC plus AVC |
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Term
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Definition
| the change in short-run total cost resulting from a one-unit increase in output |
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Term
| long-run total cost (LTC) |
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Definition
| The total cost of production when a firm is perfectly flexible in choosing its inputs |
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Term
| long-run average cost (LAC) |
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Definition
| The long run cost divided by the quantity produced |
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Term
| constant returns to scale |
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Definition
| A situation in wich the long-run total cost increases proportionately with output, so average cost is constant |
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Term
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Definition
| The change in long-run cost resulting from a one-unti increase in output |
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Term
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Definition
| an input that cannot be scaled down to produce a smaller quantity of output |
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Term
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Definition
| A situation in which the long run average cost of production decreases as output increase |
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Term
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Definition
| the output at which economies are exhausted |
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Term
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Definition
| a situation in which the long-run average cost of production increases as output increases |
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