econ chaps 9 10 11 – Flashcards
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the implicit cost of capital is
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the opportunity cost of capital used by a business
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the *BLANK* is the amount of which an additional unit of activity increases its cost
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marginal cost
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to maximize her grade in economics, Stacey should study until....
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her marginal benefit of studying equals her marginal cost of studying
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marginal analysis is relevant for
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only "how much" decisions
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according to the marginal decision rule, if the marginal benefit:
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is less than marginal cost, an activity should be reduced (MC=MB; MB<MC)
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The relationship between an individuals consumption bundle and his or her utility is called a
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utility function
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the marginal utility of coffee consumption for steve is the change in *BLANK* generated by consuming an addition unit of coffee
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total utility
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When total utility is at a maximum, marginal utility is
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zero
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the principal of diminishing marginal utility
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refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases
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marginal utility
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the difference in the total utility before.
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the marginal product of labor is
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the slope of the total product of labor curve
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the term "diminishing marginal product" refers to
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a decrease in the extra output due to the use of an additional unit of a variable input, when more and more of a variable input is used and all other things are held constant
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a fixed input is one
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whose quantity cannot be changed in a particular time period
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marginal cost is the change in
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total cost resulting from a one-unit change in output
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average variable cost equals
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average total cost - average fixed cost variable cost divided by output (total cost - fixed cost) divided by output
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the ______ curve continually declines as more output is produced in the short run
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average fixed cost
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marginal cost is the _______ of total cost
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slope
