Term
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Definition
| Period of time in which at least one factor of prduction is fixed. All production happens here. |
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Term
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Definition
| Period of time in which all factors of production are variable, but technology is fixed. All planning happens here. |
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Term
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Definition
Fixed factors are those that can't be changed
Variable Factors are factors that can change |
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Term
| Law of Diminishing Returns |
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Definition
| An Increase In variable factors is equal to an increase in returns until a point after which the return will drop. |
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Term
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Definition
Economies of scale are any falls in long run average costs that come about when a firm alters all of its factors of production in order to increase its scale of output.
Specialisation
Division of Labour
Bulk Buying
Financial economics
Transport Economic
Large Economics
Marketing Economics |
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Term
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Definition
Diseconomies of scale areanz increases in long run average costs that come about when a firm alters all of its factors of production in order to increase its scale of output
Control and communication problems
Alienation and loss of identity |
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Term
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Definition
Change in Total costs
divided by
Change in quantity produced |
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Term
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Definition
Total cost
divided by
Quantity produced |
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Term
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Definition
Total Variable Cost
divided by
Quantity produced |
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Term
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Definition
Total Fixed Cost
divided by
Quantity produced |
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Term
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Definition
These are the costs that exist even producing zero. Examples: Rent, Insurance, Mantainance
# of Fixed Factors * Cost per Factor |
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Term
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Definition
Total Product
divided by
Quantity of Labour |
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Term
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Definition
Change in Total Production
divided by
Change in Quantity of Labour |
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Term
| Increasing Returns to Scale |
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Definition
| Long run unit costs are falling as output increases |
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Term
| Constant Returns to Scale |
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Definition
| Long run average costs are constant as output increases |
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Term
| Decreasing Returns to Scale |
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Definition
| Lung run average is rising as output increases |
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Term
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Definition
| Total Variable Cost + Total Fixed Cost |
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Term
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Definition
The cost that vary with output
Example: Wages, Raw materials
# of variable factors * Cost per factor |
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Term
| Internal Dis/Economies of Scale |
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Definition
| The Unit cost decreasing or increasing in one firm |
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Term
| External Dis/Economies of Scale |
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Definition
| The size of the whole industry increases and this affects the unit cost of individual firms. |
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