Short Run vs Long Run
In the short run, what happens if production function is uneven?
What is underutilized resources?
What shape does the marginal cost curve usually take?
What is quadradic (U-shaped)?
Define economies of scale.
What is when average total cost decreases as output increases?
Formula for total cost?
TC = FC + VC
What is an implicit cost?
What is the opportunity cost of using resources you already own, without any money changing hands
What happens to marginal product when you add more workers to a fixed space?
What is eventually decreasing(law of diminishing marginal returns).
What’s the relationship between MC and ATC when MC is below ATC?
What is ATC is falling?
What is one managerial cause of economies of scale?
Specialized management and labor efficiency?
What’s the difference between accounting profit and economic profit?
What is accounting profit = total revenue − explicit costs; economic profit = total revenue − (explicit + implicit costs)
Is paying wages, rent, or buying flour explicit or implicit?
What is explicit?
What is the main difference between short-run and long-run cost adjustments?
What are no fixed variables?
When marginal product rises, what happens to marginal cost?
What is cost falling?
What type of scale is an oversized hospital?
What is diseconomies of scale?
A firm’s total cost is $600 when producing 100 units. Fixed costs are $200. What is AVC?
What is $4?
True or False: Implicit costs appear on financial statements.
What is false?
What causes the total output curve to flatten out and decline after a certain number of workers?
What is overcrowding and reduced worker efficiency?
Why does marginal cost rise after a point?
What is diminishing marginal product?
What does the flat-sloping part of the long run ATC curve represent?
What is constant return to scale?
If a business makes $200k in accounting profit but gives up $50k in opportunity cost, what’s its economic profit?
What is $150k?
A farmer uses his own land instead of renting it out for $30,000 per year. What type of cost is that $30,000?
What is implicit cost?
What does the intersection of marginal cost (MC) and average total cost (ATC) represent?
What is the lowest point of the ATC curve.
Which graph combines all the ATC?
What is the long-run average total cost curve?
What part of the long run ATC curve represents economies of scale?
What is the downward curve?
Total cost rises from $600 to $750 when output increases from 100 to 125 units. What’s the marginal cost per unit?
What is $6?
What would happen to a firm’s reported profitability if implicit costs were ignored?
What is looking more sucessful?