Microecon chapter 7 Flashcards
1
Q
Organizations of firms (6)
A
- Single proprietorship
- Ordinary partnership
- Limited partnership (general and limited)
- Corporation (private and public)
- State-owned enterprise (crown corporation)
- Non-profit organization
2
Q
Multinational entreprises (MNEs)
A
Firms that operate in more than one country
3
Q
Financial capital
A
Money firms raise for its business
4
Q
π meaning
A
Profit
5
Q
ATC formula
A
TC/Q
6
Q
AFC fromula
A
FC/Q
7
Q
AVC formula
A
VC/Q
8
Q
ATC alternative formula
A
AFC + AVC
9
Q
Why is our average cost U-shaped? (4)
A
- AVC falls initially as VC/Q is falling since workers are more productive at the margin
- AVC when ↑ as VC/Q is rising as increment workers are less productive
10
Q
Marginal cost on the graph
A
As the incremental workers are more and more productive, MC ↓ initially, and will rise as diminishing returns set in
11
Q
VC, MC and AVC relation
A
Positive (shift up/down)
12
Q
FC and ATC relation
A
Negative (shift up/down)
13
Q
TC formula
A
FC +VC
14
Q
MC formula
A
ΔTC/ΔQ = ΔVC/ΔQ
15
Q
Does FC have any Δ
A
No
