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| 12190476339 | Production Function | The relationship between the quantity of inputs a firm uses and the quantity of outputs it produces |  | 0 |
| 12190476340 | Fixed Input | An input whose quantity is fixed and cannot be varied Connection: An example of a fixed input on a farm is land. | 1 | |
| 12190476341 | Variable Input | An input whose quantity the firm can vary Connection: The ink at a printing press. | 2 | |
| 12190476342 | Long Run | The time period in which all inputs can be varied Connection: Everything can change in the long run. | 3 | |
| 12190476343 | Short Run | The time period in which at least one input is fixed Connection: There is not enough time to change some inputs during the short run. | 4 | |
| 12190476344 | Total Product Curve | Shows how the quantity of output depends on the quantity of the variable input, for a given quantity of the fixed input Connection: The total product curve is upward sloping but begins to flatten out as output increases, indicating diminishing returns to an input. | 5 | |
| 12190476345 | Marginal Product | The additional quantity of output that is produced by using one more unit of that input Connection: One more worker yields 6 more shirts, which is the marginal product. | 6 | |
| 12190476346 | Diminishing Returns to an Input | When an increase in the quantity of that input, holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input Connection: If you have too many workers, you may experience diminishing returns. | 7 | |
| 12190476347 | Fixed Cost | A cost that does not depend on the quantity of output produced; it is the cost of the fixed input Connection: The cost of the land on a farm, being a fixed input, would be the fixed cost. So, if the land is $400, the fixed cost is $400. | 8 | |
| 12190476348 | Variable Cost | A cost that depends on the quantity of output produced; the cost of the variable input Connection: Labor is a variable cost because you can hire/fire workers. | 9 | |
| 12190476349 | Total Cost | Total cost of producing a given quantity of output is the sum of the fixed cost and the variable cost of producing that quantity of output Connection: If land on a farm is $800 and labor is $200 per worker with three workers, the total cost would be $1400. | 10 | |
| 12190476350 | Total Cost Curve | Shows how total cost depends on the quantity of output |  | 11 |
| 12190476351 | Marginal Cost | The cost of each additional unit Connection: Pens have a low marginal cost since the inputs are cheap. | 12 | |
| 12190476352 | Average Total Cost | Often referred to as simply average cost, total cost divided by the quantity of output produced |  | 13 |
| 12190476353 | Average Cost | Synonym of Average Total Cost |  | 14 |
| 12190476354 | U-Shaped Average Total Cost Curve | Falls at low levels of output then rises at higher levels Connection: Long run average total cost declines as output increases (economies of scale) and then begins to increase (diseconomies of scale). | 15 | |
| 12190476355 | Average Fixed Cost | The fixed cost per unit of output Connection: falls as more output is produced as the numerator is fixed but the denominator increases. | 16 | |
| 12190476356 | Average Variable Cost | The variable cost per unit of output |  | 17 |
| 12190476357 | Minimum-Cost Output | The quantity of output at which average total cost is lowest - the bottom of the U-Shaped Average Total Cost Curve Connection: At this point, ATC= MC |  | 18 |
| 12190476358 | Long Run Average Total Cost Curve | Shows the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output Connection: U-Shaped curve. | 19 | |
| 12190476359 | Economies of Scale | When long run average total cost declines as output increases Connection: Ryan's hats experiences economies of scale from boot output 0-8 - the output levels over which the long run average total cost curve is declining. | 20 | |
| 12190476360 | Diseconomies of Scale | When long run average total cost increases as output increases Connection: Ryan's hats Boots experiences diseconomies of scale from boot output of 8 or more, the output levels over which its long run average total cost curve is rising. | 21 | |
| 12190476361 | Constant Returns to Scale | When long run average total cost is constant as output increases Connection: The firm's long run average total cost curve is horizontal over the output levels for which there are constant returns to scale. | 22 |
