Chapter 13 - The Costs of Production

Constant returns

________ to scale: the property whereby long- run average total cost stays the same as the number of output changes.

greek letter

The ________, ∆, or delta, represents the change in a variable.

Efficient scale

________: the quantity of output that minimizes average total cost.

Firm

________ cost curves don't show what decisions the ________ will make but they help determine that decision.

Total revenue

________: the amount a firm receives for the sale of its output.

average total cost curve

A graph with a longer- run ________ is flatter than a shorter- run ________.

Diminishing marginal product

_______________: the property whereby the ________ of an input declines as the quantity of the input increases.

Marginal product

________: the increase in output that arises from an additional unit of input.

Total revenue

_____________: the amount a firm receives for the sale of its output.

Implicit costs

_________________: input costs that do not require an outlay of money by the firm.

Explicit costs

_____________-: input costs that require an outlay of money by the firm.

Profit

_________: total revenue minus total cost.

Total cost

_____________: the market value of the inputs a firm uses in production.

Economies of scale

__________________: the property whereby long-run average total cost falls as the number of output increases.

Constant returns to scale

______________________: the property whereby long-run average total cost stays the same as the number of output changes.

Diseconomies of scale

______________________: the property whereby long-run average total cost rises as the number of output increases.