Economics Chapter 4
Help!
|
|
||||
|---|---|---|---|---|---|
| Business | An organization that brings individuals, financial and economic resources together to produce goods and services.
🗑
|
||||
| Production | the process of transforming a set of resources (LLC) into a good or service that has economic value
🗑
|
||||
| Inputs | Resources used in the production process
🗑
|
||||
| Output | the result of production or the quantity of goods and services that are produced.
🗑
|
||||
| Primary business | resources are extracted or cultivated
🗑
|
||||
| Secondary business | resources make fabricated or processed goods
🗑
|
||||
| Service (tertiary) businesses | retail or wholesale goods
🗑
|
||||
| Labour Intensive Process | more labour and less capital ex: building a home
🗑
|
||||
| Capital Intensive Process | more capital and less labour ex: building a car
🗑
|
||||
| Explicit costs | payments made by a business to another business/people outside it
🗑
|
||||
| Implicit costs | are the estimates of what an owner gives up by being involved with a business
🗑
|
||||
| Accounting Profit | Revenue - Explicit Costs
🗑
|
||||
| Economic Profit | Revenue - (Explicit Costs + Implicit Costs)
🗑
|
||||
| Fixed Inputs | inputs that can not be adjusted in the short run
🗑
|
||||
| Variable inputs | input that can adjusted in the short run
🗑
|
||||
| Total Product (TP) | The overall quantity of output with a given workforce. To increase production you must increase the variable input
🗑
|
||||
| Average Products | the quantity of output product per worker (Q/L)
🗑
|
||||
| Marginal Product | the extra output produced by an additional worker (change in Q/ change in L)
🗑
|
||||
| Fixed Costs (FC) | do not change when a company changed its quantity of output (FC)
🗑
|
||||
| Variable Costs (VC) | change when a company adjusts the quantity produced
🗑
|
||||
| Total Costs | the sum of all fixed and variable costs at each quantity of output (FC+VC)
🗑
|
||||
| Marginal Cost | the extra cost of producing an additional unit of output (change in TC/ change in TP)
🗑
|
||||
| Average Fixed Cost | the fixed cost per unit of output (FC/TP)
🗑
|
||||
| Average Variable Cost | the variable cost per unit of output (VC/TP)
🗑
|
||||
| Average Cost | total cost per unit of output (AFC+AVC)
🗑
|
||||
| Law of Diminishing Marginal Returns | at some point, as more Variable inputs are added to Fixed inputs, the marginal product will start to decrease
🗑
|
||||
| Increasing Returns to Scale | a situation in which a % increase in all inputs causes a larger % increase in output. Reasons: Division of Labour, specialization of capital, and specialization of management. Ex: Ford, Amazon
🗑
|
||||
| Constant Returns to Scale | a situation in which a % increase in all inputs causes an exact increase in outputs. Ex: small businesses
🗑
|
||||
| Decreasing Returns to Scale | A situation in which a % increase in all inputs causes a smaller % increase in outputs. Reasons: Management difficulties, limited resources. Ex: handmade products, very small businesses
🗑
|
||||
| Long Run Average Cost | is the lowest value of the SR AC at each possible level of output.
🗑
|
Review the information in the table. When you are ready to quiz yourself you can hide individual columns or the entire table. Then you can click on the empty cells to reveal the answer. Try to recall what will be displayed before clicking the empty cell.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Created by:
Livi1234
Popular Economics sets