Econ Quiz on 11/7/23

Total costs (TC)

fixed + variable costs

Average Total Cost (ATC)

TC/Q

Average Fixed Cost (AFC)

TFC/quantity

Average Variable Cost (AVC)

TVC/quantity

Fixed Costs (FC)

Costs that do not vary with the quantity of output produces.

Variable Costs (VC)

Costs that vary with the quantity of output produced

Variable Costs example

Labor, energy, materials

Transaction Cost Example

Looking for schools, we need information to make a decision, which takes time and cost.

Example of Fixed Cost

Rent, insurance, taxes

Transaction Costs

The cost of consummating an economic transaction

Opportunity costs

Whatever must be given to obtain some item

Opportunity cost example

With Covid most agree social distancing is necessary, others argue that the opportunity cost of doing so is too high in terms of an economic slowdown

Marginal Cost (MC)

change in TC/change in Q

Marginal Revenue (MR)

change in TR/change in Q