AP Econ Chapter 8 Test

Ace your homework & exams now with Quizwiz!

What is fixed cost?

does not change with changes in output (rent)

What happens to TVC in the short run?

it will increase for a time at a diminishing rate, buy beyond some pint will increase at a increasing rate

If the amount of variable resources needed to produce any level of output go down, the MC curve will...

shift downward

What is the TC-TVC?

total fixed cost

For most producing firms:

average total costs decline as output is carried to a certain level, and then begin to rise

Total Fixed Cost:

does not change as total output increases or decreases.

The law of diminishing returns results in:

a total product curve that eventually increases at a decreasing rate

What are the short run production costs?

Fixed cost, variable cost, total cost, and marginal cost

True or false?

Marginal cost intersects average total cost at the latter's minimum point

How do you find economic costs?

Take total revenue and subtract by explicit and implicit costs (all costs)

How do you find average product?

Total product subtracted by # of workers

What is marginal cost?

additional cost of producing one more unit of a product

Fixed Cost is...

any cost which does not change when the firm changes it's output

The law of diminishing returns indicates that:

beyond some point extra utility derived from additional units of a product will yield the consumer smaller and smaller amounts of utility

Marginal Cost is...

change in total cost that results from producing one more unit of output (change in TC)

Average fixed cost:

declines continually as output increases

What is variable cost?

going to change when you make more product (labor)

Explain the movement of Marginal Product

may initially increase, then diminish, and ultimately become negative

What is total cost?

sum of fixed cost and variable cost

Normal Profit is...

the return to the entrepreneur when economic profits are 0, a return for the entrepreneur's labor

Marginal Product is...

total profit divided by the number of workers employed

How do you find fixed costs on a diagram?

vertical distance between AVC and ATC


Related study sets

Fundamentals of Nursing Ch 1 Introduction to Nursing

View Set

PrepU -- Chapter 7: Legal Dimensions of Nursing Practice

View Set

MLT ASCP Chemistry Practice Questions

View Set

Ch. 38 Intracranial regulation/neuro disorders

View Set

Biology Assignment 1: Cell theory

View Set

MIS 410 Mid Term Study Guide Chapter 6

View Set

Blinn General psychology PsychSim6 Quiz: Short-Term Memory

View Set