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Micro Economics Final Test
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Economic Profit
Total revenue minus opportunity costs/total costs (explicit and implicit costs) is called
Accounting Profit
Economic Firm
: Implicit costs + Economic Profit
Accounting Firm
: Total revenue-explicit costs
Total Costs
Implicit and Explicit Costs
The difference between accounting profit and economic profit relates to
the manner in which costs are defined.
A production function is a relationship between...
inputs and quantity of output.
production function
quantity of inputs and quantity of output
Economies of Scale
When ATC falls as the quantity of output increases
Diminishing Marginal Product
When marginal product of an input declines as the quantity of an input increases.
Diseconomies of Scale
When long-run ATC rises as the quantity of output increases.
If a firm produces nothing, costs that would be zero...
Variable costs
Average?
Marginal?
Average
: Cost of a typical unit
Marginal
: Cost of an additional unit
When firms are said to be price takers, it implies that if a firm raises its price...
Buyers will go elsewhere
Best reflection for price-taking firm:
If the firm would change their price to more than the going price, it would sell none of its goods.
In a perfectly competitive market, change in output, but no change in price means...
Total Revenue
When a profit-maximizing firm in a competitive market has zero economic profit, accounting profit...
is positive
MR=MC
A monopoly's marginal cost will be...
Less than the price per unit of its product
Author
ut_1892
ID
55202
Card Set
Micro Economics Final Test
Description
Final Exam Review
Updated
2010-12-12T20:49:46Z
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