Econ 247 Exam Questions with 100%
Correct Answers
Total Revenue - the amount a firm receives for the sale of its output
Total Cost - the amount that the firm pays to buy inputs
Total Profit - total revenue - total cost
Explicit costs - input costs that require an outlay of money by the firm
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Econ 247 Exam Questions with 100% Correct Answers Total Revenue - ✔✔the amount a firm receives for the sale of its output Total Cost - ✔✔the amount that the firm pays to buy inputs Total Profit - ✔✔total revenue - total cost Explicit costs - ✔✔input costs that require an outlay of money by the firm Implicit cost - ✔✔Do not require a cash outlay economic profit - ✔✔total revenue minus all opportunity costs, explicit and implicit of producing the good and services sold. Accounting profit - ✔✔total revenue minus total explicit cost production function - ✔✔the relationship between quantity of inputs used to make a good and the quantity of output of that good Marginal Product - ✔✔the increase in the quanti ty of output that is obtained from an additional unit of input diminishing marginal product - ✔✔the property whereby the marginal product of an input declines as the quantity of the input increases Fixed Costs - ✔✔Costs that do not vary with the quantity o f output produced Variable costs - ✔✔costs that vary with the quantity of output produced Total Cost - ✔✔fixed costs plus variable costs Average fixed cost - ✔✔fixed cost divided by the quantity of output average variable cost - ✔✔variable cost divided by the quantity of output average total cost - ✔✔total cost divided by the quantity of output Marginal cost - ✔✔the amount that total cost rises when the firm increases production by 1 unit of output. efficient scale - ✔✔the quantity of output that minimizes average total cost cost curve properties - ✔✔1. MC eventually rises with the quantity of output. 2. The ATC curve is u shaped. 3. MC curve crosses the ATC curve at the minimum of ATC. Cost in short run and long run - ✔✔Cost is fixed in short run and cost is variable in long run economies of scale - ✔✔long-run average total cost falls as the quantity of output increases
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