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What is the cost that varies as the level of output varies known as?
Variable Cost
What is the total economic cost of production known as, consisting of fixed and variable costs?
total cost
What is the cost that does not vary with the level of output known as?
Fixed costs
What is the total money received from the sale of any given quantity of output known as?
total revenue
payments for materials, fuel, power, variable resources, transportation services, or most labor are examples of this.
variable costs
These costs do not increase with the success or failure of the company.
Fixed costs
Things that go into a good or service are known as:
Inputs
What is the value of a highest forgone alternative known as? (cost associated with opportunities that are forgone when a firm's resources are not put to their highest-value use)
Opportunity Cost
Each firm uses various inputs (resources) in its production activity. What are the three most commonly used inputs?
Land (natural resources), Labor (wages and salaries), & Capital (factory, buildings, machines, tools, equipment).
When employees focus on producing at what they are best is called
specialization
............................... measures the amount of output that can be produced from a given amount of input.
productivity
how to calculate average cost per unit?
total cost/ total output
What are some examples of variable costs? (costs that change based on production)
Labor, electricity, raw materials
What are some examples of fixed costs? (costs that do not change based on production)
Capital goods, machines, buildings, utilities.
This type of cost is the variable cost divided by the level of output. ( ___ = VC / Q )
Average Variable Cost
This type of cost is the fixed cost divided by level of output. ( ___ = FC / Q )
Average Fixed Cost
If a companies expense report looked as follows: Power expense-$267 Transportation expense-$104 supplies expense-$45 Rent-$650 This cost would be represented as $1,066
total costs
A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000, then the TFC is...
$200
firm produces 620 units of output at a total cost of $1,480. If total variable costs are $1,000, then the AVC is...
$1.61
firm produces 400 units of output at a total cost of $1,200. If variable costs per unit of output are $2.50, then the AFC is...
50 cents.