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