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Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
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Production function
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The relationship between inputs a firm uses and the output they can produce
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Technology
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The processes a firm uses to produce output
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Techonological change
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A change in the ability of the firm to produce output with a given amount of inputs
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Short run
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The time frame in which at least one variable is fixed
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Long run
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The time frame in which all inputs are variable
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Variable costs
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Costs that change as output changes
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Fixed costs
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Costs that remain constant as output changes
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Total cost
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The cost of all the inputs a firm uses in production
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TC=
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FC + VC
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When Q=0
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TC=FC
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AVG TC
|
TC / QORAFC + AVC
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AVG VC
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VC / Q
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AVG FC
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FC / Q
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Implicit costs
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Opportunity costs (value of next best alternative)
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Explicit costs
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Costs that involve spending money
(accounting costs) |
