Production

accounting profits

= total rev- total account (explicit) costs referred to as NI, net profit, net earnings or "bottom line"

Marginal cost

=change in total cost/change in output

the long run is

a period of time in which al inputs of production are variable

Short run is a period of time in which

at least one input of production is fixed

Total product divided by the number of units a resource employed give the ______product of the resource

average

total product divided by the number of units of a resource employed gives the ______product of the resource

average

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

average total cost

a condition in which the longe run average total cost of production remains constant as production increases is called

constant return to scale

If a business owner can produce more as a whole with an additional worker even if the marginal product associated with that worker is lower than the marginal product associated with the previous worker, then there are

diminishing marginal returns.

Zero_____ profit means your revenues are covering not only all the monetary payments you have to make but also all of your implicit costs

economic

postive___ profits encourage more firms to enter the market to produce goods and services

economic

a condition in which the long run average total cost of production decreases as production increases is called

economies of scale

The marginal cost is the

extra or additional cost associated with the production of an additional unit of output

when the marginal product increases, the marginal cost of production

falls

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

how much production it takes to reach the minimum long run average total cost

cost for which no monetary payment is explicitly made are

implicit cost

Decreasing marginal returns are a characteristic fo production whereby the marginal product of the next unit of variable resource utilized is _______ than the previous variable resources

less

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

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

when the _____ cost falls below the ____ cost, the average cost should be decreasing

marginal, average

zero accounting profit means that the value of economic profit is

negative

a curve showing the average total cost for different levels of output when at least ___ input of production is fixed, typically plant capacity, is the short-run average cost curve

one

cost is the cost of the next best alternative that is foregone

opportunity

total revenue equals

price times quantity

average fixed cost always declines as a firm produces more

product

when the marginal _____increases, the marginal cost of production declines

product

minimum efficient scale

the lowest level of output at which a firm can minimize long-run average costs

minimum-efficiency scale refers to the

lowest level of output at which the long-run average total cost is minimized

incresasing____ returns is a 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

marginal

In making decision about how much output it should produce to maximize its profits, which two pieces of information does a firm need

the extra benefit of producing that unit the extra cost associated with producing an additional unit of output

Total cost equals

total fixed cost + total variable cost

economic profit

total revenue minus total cost, including both explicit and implicit costs