Production

Which of the following is true of economic costs?

Economic costs are defined as the sum of explicit and implicit costs.

____________ marginal return is characteristic of production whereby the marginal product of the next unit of a variable resource utilized is greater than that of the previous variable resource

Increasing

Total revenue minus the explicit cost of production is __________ profit.

accounting

The amount of output produced per unit of a resource employed is the _______ product.

average

Total fixed cost divided by the amount of output produced is equal to

average fixed cost

Total variable cost divided by the amount of output produced is equal to

average variable cost (AVC=TVC/Q)

A condition in which the long-run average total cost of production remains constant as production increases is called:

constant returns to scale

Business operating decision should be based on _________ profit.

economic

Negative _________ profits encourage firms to exit the market

economic

Total revenue minus the explicit and implicit costs of production is ___________ profit.

economic

The costs associated with the use of resources are called:

economic costs.

Monetary payments made by individuals, firms, governments for the use of others' land, labor, capital and entrepeneurial ability are ____________ costs.

explicit

Total revenue minus the total ________ costs of production is accounting profit.

explicit

When marginal cost is less than average cost, average cost _______

falls

Total costs equals total _____ cost plus total variable cost

fixed

The shape of the long-run average total cost curve can differ for different types of firms depending on

how much production is takes to reach the minimum long-run average cost

The opportunity costs of using owned resources are _________ costs.

implicit

Economies of scale can result from a variety of factors, including

lower costs of inputs as firms purchase larger quantities; productivity gains from more specialized labor

The cost associated with an additional unit of output is called _________ (marginal/average) cost.

marginal

The additional output produced as a result of utilizing one more unit of a variable resource

marginal product

The _______ costs of using owned resources are implicit costs

opportunity

Costs that do not change with the amount of __________ produced are fixed costs

output

The total amount of output produced with a given amount of resources is known as the total

product

Total ________ equals price times quantity

revenue

A period of time in which at least on input of production is fixed is known as the _______ run

short

A period of time in which at least one input of production is fixed is known as the

short run

Costs that change with the amount of output produced are ________ costs.

variable

Costs that change with the amount of output produced are __________ (variable/fixed) costs.

variable