question

-represent the desire of consumers not to sacrifice goods that could be produced if the same resources were employed elsewhere.

answer

cost

question

Businesses spend money only to produce....

answer

what consumers want

question

-indicate the desire of consumers for other good that might have been produced with the same resources

answer

The cost of a firm

question

what is the difference between accounting profit and economic profit?

answer

accounting profit is total revenue - total cost and economic profit is total revenue - total cost - opportunity cost.

question

total revenue-total cost-oppourtunity cost=

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economic profit

question

total revenue-total cost=

answer

accounting profit

question

account profit ___economic profit

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greater than or equal to

question

economic profit is usually _____than accounting profit

answer

less

question

The most important implicit cost omitted from an accounting statement of a firm is the?

answer

opportunity cost

question

when the firm is earning ________, the firm is increasing the value of the resources that it is using

answer

economic profit

question

suppose a professor of accounting finally decides to give up his teaching job and devote time to selling wine. if the average salaries of professor rise, then his economic profit from making wine will?

answer

fall because opportunity cost went up

question

if the salary offered to professors rises, his opportunity cost for making wine will

answer

rise

question

normal profit occurs when a firm earns _____economic profit

answer

zero

question

if a firm earns zero economic profit does this mean the firm is barely making it?

answer

no they could be making a huge accounting profit

question

is defined as the time period in which a firm cannot alter the size of its plant or add/remove heavy equipment. or a period time in which at least one input is fixed.

answer

short run

question

*it would be hard to alter the size of your plant/building * the firm can alter the variable resources such a labor and raw materials

answer

short run

question

is a time period in which the firms do not have sufficient time to increase the size of their plant or factory

answer

short run

question

is defined as the time period in which firm can alter the size of their plant and everything else and when firms can enter/exit the market.

answer

long run

question

a period of time in which all inputs are variable.

answer

long run

question

thus all firms resources are ______in the long run

answer

variable

question

What are short run key words?

answer

marginal cost, marginal product, law of diminishing returns

question

costs that remain UNCHANGED when output rises or falls in the short run; the one only way these costs get eliminated is when a firm goes out of business. examples include property taxes on a factory or monthly payment for leasing a building

answer

Total fixed cost

question

the total fixed cost for los compadres is?

answer

building

question

costs that vary as output rises or falls. examples include labor and electricity

answer

total variable cost

question

the total variable cost for los compadres is?

answer

cable, food, mexicans

question

total fixed cost plus total variable cost=

answer

total cost

question

total cost equation is...

answer

total fixed cost plus total variable cost

question

total fixed cost divided by quantity is

answer

average fixed cost

question

total variable cost divided by quantity is

answer

average variable cost

question

total cost divided by quantity or average fixed cost plus average variable cost =

answer

average total cost

question

the change in total cost when output increase by one unit

answer

marginal cost

question

example: pita pit TFC=Rent/building 2,000 a month TVC=Employers/ingredients 5,000 a month what is the total cost of this?

answer

7,000

question

example: pita pit Let q be 100 TFC=Rent/building 2,000 a month TVC=Employers/ingredients 5,000 find AFC?

answer

20

question

example: pita pit Let q be 100 TFC=Rent/building 2,000 a month TVC=Employers/ingredients 5,000 find AVC?

answer

50

question

example: pita pit Let q be 100 TFC=Rent/building 2,000 a month TVC=Employers/ingredients 5,000 FIND ATC?

answer

70

question

the total cost of 110 pitas is 3000. The total cost of 111 pitas is 3010. What is the marginal cost of the 111th pita?

answer

10

question

Average total cost is hight at lower levels of production because ______is high( quantity is low so that mean average fixed cost is high)

answer

average fixed cost

question

ATC have what kind of shape?

answer

u shaped

question

average total cost is high at larger levels of production because______is high(diminishing marginal revenue)

answer

marginal cost

question

marginal cost and marginal product move in

answer

opposite directions

question

when marginal product of labor decreases (diminishing returns), marginal cost___________and vice versa

answer

increases

question

the law of diminishing returns implies that expansion in output will eventually lead to a__________in marginal cost and a __________in average total cost

answer

rise and rise

question

The marginal will tell the __________what to do

answer

average

question

in order to have the law of diminishing returns present, we must be in the_______. this implies when we have atleast one factor of production fixed(the building)

answer

short run

question

The minimum point of the average total cost curve occurs where it intersects the marginal cost curve true or false?

answer

true

question

When the marginal cost is greater than average total cost then average total cost will

answer

rise

question

the minimum point of the average variable cost curve occurs where it intersects the ?

answer

marginal cost curve

question

when marginal cost is less then average variable cost then AVC will

answer

fall

question

When marginal cost is less than the average cost, marginal cost...

answer

marginal cost may be rising, falling, or constant

question

what is the difference between the average total cost and average variable cost?

answer

average fixed cost

question

notice the AFC decreases with increases in

answer

output

question

the difference between the ATC and AVC curves will decline as production?

answer

increases

question

AFC will always________as out put expands

answer

decrease

question

whenever you see scale think of?

answer

longrun

question

-the combo of several ATC curves for different possible outputs.

answer

long run ATC curve

question

traces out all the minimum points of short run ATC curves. it also shows the possible plant sizes corresponding to specific output values.

answer

the long run ATC curve

question

economies of scale is the_______to a firm from becoming larger. also known as increasing return to sales

answer

benefit

question

when a firm experiences economies of scale, an increase in the size of its operations will lead to a _________in ATC

answer

decrease

question

is the cost to a firm from becoming too large. also known as decreasing returns to scale

answer

Diseconomies of scale

question

when a firm experiences diseconomies of scale, an increase in the size of its operations will lead to a _______in average total cost.

answer

increase

question

mass production technique and specialization and division of labor are ?

answer

causes to the economies scale

question

bureautic and inefficiencies and principal agent problem are ?

answer

causes to the diseconomies of scale

question

The long run average total cost will be________ when a firm experiences economies of scale at low levels of production and diseconomies of scale at a high levels of productions

answer

u shaped

question

what determines the shape of cost curves in the short run?

answer

diminishing returns

question

what determines the shape of cost curves in the long runs?

answer

economies of scale

question

what are the factors that shift cost curves?

answer

prices of resources, taxes, regulations, technology

question

resources=

answer

labor

question

an increase in resource prices will shift cost curve?

answer

upward

question

a decrease in resource prices will shift cost curves

answer

downward

question

an increase in taxes levied on the seller will shift cost curves

answer

upward

question

a decrease in taxes levied on the seller will shift cost curves

answer

downward

question

an increase in regulations will shift cost curve

answer

upward

question

a decrease in regulations will shift cost curves

answer

downward

question

an increase in technology will shift cost curves

answer

downward

question

the implementation of computers and robots across the world has shifted cost curve

answer

downward

question

as cost curve shift upward, supply shifts

answer

left

question

as cost curve shift downward, supply shifts

answer

right

question

historical costs of past decisions that cannot be recovered

answer

sunk cost

question

sunk costs are not relevant when making current and ...

answer

future decisions

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