Chapter 13 Micro Final Flashcards Preview

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Flashcards in Chapter 13 Micro Final Deck (22):
1

Implicit Costs

The owners time

2

Economic Profit Equation

EP= TR-TC



Economic Profit = Total Revenue- Total Cost

3

What are costs in terms of opportunity costs?

Implicit Costs such as time spent at the factory

4

Average Variable Cost Equation

VC
-----
Q



Variable Cost
------------
Q

5

Accounting Profit Equation

AP = TR- TEC



Accounting Profit = Total Revenue- Total Explicit Cost

6

Average Total Cost Equation

TC
-----
Q



Total cost
-------
Q

7

What is the difference between economic and accounting profit?

Accounting Profit has NO implicit costs

8

Total Cost Equation

TC = FC + VC



Total cost = Fixed Cost + Variable costs

9

Marginal Product

🔼Q
------
🔼L



Change in Quantity
------------------
Change in Labor

10

Profit Equation

Profit = TR - TC



Profit = Total Revenue- Total Cost

11

Production Function

Shows the relationship between Quantity of workers and Quantity of goods produced

12

Explicit Costs

Paying your employees

13

Costs in Short Run

Some factors of production do not change

14

Economies of Scale

The more you produce the cheaper each unit is to produce

15

What are 2 different ways to write the Total Revenue Equation

TR = P x Q
TR= P+ TC



Total Revenue = Price x Quantity
Total Revenue = Profit + Total Cost

16

Costs in Long Runs

ALL factors of production can change

17

Marginal Cost Equation

MC = 🔼TC
-------
🔼Q


Marginal Cost = change total cost
--------------
Change in Quantity

18

What is the difference between implicit and explicit costs?

Implicit: no money required

Explicit: requires money

19

Total Cost Definition

How much company pays for the assembly of the product and price of labor

20

What 2 things are included in the total cost of economic profit?

Explicit Cost
Implicit Cost

21

Average Fixed Cost

FC
------
Q



Fixed cost
---------
Q

22

Diseconomies of Scale

As company grows the average cost of production increases

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