AP Micro: UNIT 3 Flashcards

9685147009	Revenue	Price x Quantity	0
9685156593	Accounting Profit	Total revenue - explicit costs	1
9685161496	Economic Profit	total revenue- explicit + implicit costs	2
9685174353	Normal Profit	zero economic profit, break even	3
9685186435	Profit Maximizing Rule	MR=MC	4
9685193251	Total Profit	Total revenue - total cost	5
9685205376	Total physical product	total output or quantity produced	6
9685210882	Marginal Product	the additional output generated by additional inputs	7
9685215038	Average Product	the output per unit of input total product/ units of input	8
9685222953	Marginal Revenue	the change in total revenue generated by an additional unit of output	9
9685233824	Marginal Cost	the change in total cost generated by producing and additional unit	10
9685252559	Fixed Resource	any input that doe not change with the quantity produced	11
9685258100	Variable Resources	inputs that change with the quantity produced	12
9685269388	The law of diminishing marginal returns	as variable inputs are added to a fixed resource the additional output produced from each input will eventually fall	13
9685284050	Increasing marginal returns	stage 1, marginal product and total product are both increasing	14
9685288272	Diminishing marginal returns	stage 2, total product is increasing but at a slower rate, marginal product beings to decrease	15
9685301580	Negative marginal returns	stage 3, total product is decreasing and marginal product is negative	16
9685321148	Long run	time period in which all inputs can be variable	17
9685324048	Short run	time period in which at least one input is fixed	18
9685332312	Firm earning a profit	TR > TC	19
9685335730	Firm breaking even	TR = TC	20
9685340032	Firm incurring a loss	TR < TC	21
9685346557	Fixed Costs	costs that are not affected by the quantity produced	22
9685350236	Variable Costs	costs that change as more or less is produced	23
9685360449	Average Fixed Cost (AFC)	=fixed cost/ quantity	24
9685369570	Average Variable Cost (AVC)	=variable cost/ quantity	25
9685372420	Total Cost	sum of fixed costs and variable costs	26
9685382587	Average Total Cost (ATC)	= total cost/ quantity	27
9685406778	Economies of scale	long run ATC decreases as output increases	28
9685413716	Minimum cost output	the quantity at which ATC is lowest. Where MC intersects with the ATC curve	29
9685443884	Constant return to scale	The long run ATC is at its lowest. Output increases directly in proportion to an increase in inputs	30
9685471619	Diseconomies of Scale	Long run ATC increases as output increases	31
9685496447	Characteristics of Perfect Competition	many firms identical products low barriers to entry price takers	32
9685510932	Barriers to Entry	any obstacle to a firm attempting to enter the market	33
9685517804	Types of barriers to entry	economies of scale superior technology Geography Resource ownership government created	34
9685536828	Price taker	an individual firm has no control over the price in the market. Price is set by equilibrium	35
9685553616	Shut Down Rule	a firm will stop producing when the price in the market falls below their minimum AVC	36
9685573384	Per Unit	tax or subsidy that only affects VARIABLE COSTS	37
9685576626	Lump Sum	tax or subsidy that only affects FIXED COSTS	38
9685594166	PC in long run equilibrium	Price= MC = Minimum ATC	39
9685602510	Constant Cost Industry	new firms entering the market DO NOT increase the costs for the firms already in the market	40
9685618760	Productive Efficiency	Producing at the lowest possible cost Where price= minimum ATC	41
9685624177	Allocative Efficiency	producing the amount desired by society Where price = MC	42