Intro to Food and Resource MSU test 3

An example of technological change is

-being able to produce the same output using fewer inputs -being able to produce more output using the same inputs. -a decline in the quantity of output that can be produced from a given quantity of inputs.

The World Trade Organization (WTO)

-generally aids in negotiating trade agreements that include not only goods but also services and intellectual property -replaced the General Agreement on Tariffs and Trade (GATT) in January 1995. -. is an international organization that oversees international trade agreements.

Technological change is

A change in the ability of a firm to produce a given level of output with a given quantity of inputs

what are explicit costs?

A cost that involves spending money

What is the difference between the average cost of production (ATC) and marginal cost of production (MC)?

ATC= TC/Q MC= #TC/#Q

How are implicit costs different from explicit costs?

An explicit cost is a cost that involves spending money, while an implicit cost is a nonmonetary cost

_____ is a situation in which a country does not trade with other countries. The _____ is the ratio at which a country can trade its exports for imports from other countries.

Autarky, terms of trade

How do specialization and division of labor typically affect the marginal product of labor?

In the initial stages of production, specialization and division of labor lead to an increasing marginal product for workers, allowing workers to concentrate on a few tasks so that they become more skilled at doing them quickly and efficiently

What is the distinction between the economic short run and the economic long run?

In the short run, at least one input is fixed, but in the long run, the firm can vary all inputs.

What is the difference between the short run and the long run?

In the short run, at least one of a firm's inputs is fixed, while in the long run, a firm is able to vary all its inputs and adopt new technology

How can marginal cost be expressed mathematically?

MC= #TC/#Q , where TC is total cost and Q is output.

What is the difference between technology and technological change?

Technology is the process of using inputs to make output, while technological change is when a firm is able to produce more output using inputs.

Who is harmed when individual nations move from autarky to free trade?

The owners of the firms that went out of business.

Which of the following is true of the relationship between the average product of labor and the marginal product of labor ?

Whenever the marginal product of labor is greater than the average product of labor, the average product of labor must be increasing

What are implicit costs?

a nonmonetary opportunity cost.

short run

a period of time during which at least one of a firm's inputs is fixed.

diseconomies of scale

a situation in which a firm's long-run average costs rise as the firm increases output.

What is the law of diminishing returns?

adding more of a variable input to the same amount of a fixed input will eventually cause the marginal product of the variable input to decline.

What is the difference in the short run and the long run? In the short run...

at least one of the firm's inputs is fixed, while in the long run, the firm is able to vary all its inputs, adopt new technology, and change the size of its physical plant

All of the following cost measures reach their minimum points when they are equal to the value of marginal cost, except one. Which cost measure is the exception?

average fixed cost

What cost measure is equal to AFC+AVC ?

average total cost (ATC)

Your company incurs a cost for , which, in the short run, is fixed. What happens to this cost in the long run?

becomes a variable cost.

positive technological change is defined as

being able to produce more output using the same inputs and being able to produce the same output using fewer inputs

the main sources of comparative advantage are the following:

climate and natural resources, relative abundance of labor and capital, technology, external economies.

Which of the following is most likely to a variable cost for a business firm?

cost of shipping products

Any cost that remains unchanged as output changes represents a firm's

fixed cost

imports are...

goods and services bought domestically but produced in other countries

Exports are....

goods and services produced domestically but sold to other countries

What is a production function?

illustrating the relationship between inputs and the maximum amounts of output that the firm can produce with these inputs.

Which of the following is most likely to be a fixed cost for a farmer?

insurance premiums on property

One effect of tariffs and quotas

is to cost jobs outside the industries immediately affected.

constant returns to scale:

its long-run average cost remains unchanged as it increases output.

Firms experience economies of scale for several reasons. What is one such reason?

managers become more specialized, enabling them to become more productive, as output expand

Comparative advantage may

may change as time passes and circumstances change.

We do not see complete specialization in the real world because

not all goods and services are traded internationally, production of most goods involves increasing opportunity costs, and tastes for products differ.

dumping is

selling a product for a price below its cost of production

As output increases, the vertical distance between average total cost and average variable cost curves gets _______ and equals _______.

smaller; average fixed cost

tariffs are...

taxes imposed by a government on imports of a good into a country

Economists assume that firms search for the cost-minimizing combination of inputs that will allow them to produce a given level of output. On what two factors does the cost-minimizing combination of inputs depend?

technology and input prices.

Comparative advantage is

the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.

marginal product of labor is

the additional output a firm produces as a result of hiring one more worker.

What does the short-run production function hold constant?

the amount of capital.

What is marginal cost?

the change in a firm's total cost from producing one more unit of a good or service

long run

the firm can vary all of its inputs, adopt new technology, and increase or decrease the size of its physical plant.

Economies of Scale is

the firm's long-run average costs falling as it increases the quantity of output it produces.

What is the production function?

the inputs employed by a firm and the maximum output it can produce with those inputs

In economics, the best definition of technology is

the process a firm uses to turn inputs into outputs

What is technology?

the processes a firm uses to turn inputs into outputs of goods and services

The primary difference between a quota and a voluntary export restraint (VER) is that

the quota is unilaterally imposed by one nation on the other while the VER is the result of negotiations between nations.

production function is

the relationship between the inputs employed and the maximum output from those inputs

What is the difference between total cost and variable cost in the long run? in the long run...

the total cost of production equals the variable cost of production

Any cost that changes as output changes represents a firm's

variable cost.

Which costs are affected by the level of output produced?

variable costs