Unit 1
The graph that demonstrates all possible points of production
What is the PPC?
Quantity is insensitive to a change in price
What is inelastic?
The firm is allocatively efficient
MC=MR
Returns to scale if a firm increases input by 10 and output increases by 10
What is Constant Returns to Scale?
The fundamental problem of economics
What is Scarcity?
Downward sloping line on Price x Quantity Graph
What is demand?
Is a straight line in the short-run cost graph
What is demand (AR,P,MR)
The downward sloping part of the long-run cost curve
What is Economies of Scale?
Ability to produce at a lower opportunity cost
What is Comparative Advantage?
If the price of a product increases, people buy less of the product and more of another product
What is the Substitution Effect?
What is shut down point?
This causes economies of scale
What is mass production?
All explicit costs given up
What are Trade-offs?
The elasticity if the demand is perfectly linear
What is unit elastic?
What is Average Fixed Cost?
What is Fixed Cost?
MUx/Px=MUy/Py
The cross-price elasticity if two goods are complements
What is negative?
A change in this cost shifts MC, AVC and AFC
What is Fixed Cost?
The constant returns to scale part of the graph is also referred to as this
What is minimum efficient scale?