ECON Chapter 5 Notes.txt

The ability and willingness to seel specific quantities of a good at alternative prices in a given time period.

Resource inputs used to produce goods and service e.g. land, labor, capital, entrepreneurship.

Marginal Physical product, the change in total output associated with one additional unit of input.

The marginal physical product of a variable input declines as more of it is employed with a given quantity of other inputs.

The period in which the quantity of some inputs cannot be changed.

A period of time long enough for all inputs to be varied (no fixed cost).

The difference between total revenue and total costs.

The market value of all resource used to produce a good or service.

Costs of production that do not change when the rate of output is altered, e.g. the cost of basic plant and equipment.

Costs of production that change when the rate of output is altered e.g. labor and material costs.

Total cost divided by the quantity produced in a given time period.

The increase in total cost associated with a one-unit increase in production.

The selection of the short-run rate of output (with existing plant and equipment).

The decision to build buy or lease plant and equipment: to enter or exit and industry.

The value of all resources used to produce a good or service: opportunity cost.