Cost Concepts
These costs stay the same no matter how much is produced, and are also called overhead.
What are fixed costs?
Price multiplied by the number of units sold gives this.
What is total revenue?
Workers 1, 2, and 3 have marginal products of 5, 9, and 12. Total product is this.
What is 26?
This period is long enough for a firm to adjust all of its resources, including capital.
What is the long run?
Bad weather ruins coffee crops, so supply shifts in this direction.
What is left?
Wages and raw materials are examples of this type of cost.
What are variable costs?
This is the most important measure of revenue for businesses.
What is marginal revenue?
Price rises from $10 to $12 and quantity supplied rises from 50 to 55. Give the coefficient and the category.
What is 0.5, inelastic?
Stage II is known by this name.
What is decreasing, or diminishing, returns?
Several gas stations in a small town close. Name the direction and the factor.
What is a shift left, caused by the number of sellers?
Total cost equals these two added together.
What are fixed costs and variable costs?
Profit equals total revenue minus this.
What is total cost?
Price rises from $20 to $25 and quantity supplied rises from 400 to 500. Give the coefficient and the category.
What is 1.0, unit elastic?
When a worker’s marginal product is negative, total output does this.
What is falls?
New law requires costly emission controls on all cars. Name the direction and the factor.
What is a shift left, caused by government regulations?
To find marginal cost, divide the additional cost by this.
What is additional output?
Profit is maximized where these two are equal.
What are marginal cost and marginal revenue?
Output rises from 90 to 110 units and total revenue rises from $1,350 to $1,650. Marginal revenue per unit is this.
What is $15?
SA firm avoids Stage III because of this.
What is workers getting in each other’s way, so total output falls?
E-commerce lowers this point by reducing fixed costs.
What is the break-even point?
A firm has $50 in fixed costs and hires 6 workers at $90 each. Its total cost is this.
What is $590?
The next worker’s marginal cost is $22.50 and marginal revenue is $15. Should the firm hire the worker?
What is no, because profit would fall?
Fixed costs are $60, each worker costs $40, and units sell for $8. Three workers make 34 units. Profit is this.
What is $92? Total cost is $180 and total revenue is $272.
Stage II begins with this worker, whose marginal product of 20 is lower than the previous worker’s 28.
What is the 6th worker?
Explain why the supply of nuclear power is inelastic in the short run.
What is that raising output takes engineering, capital, technology, and heavy regulation?