Flashcards in PHASE 2 - Adobe Ch. 6 -Businesses and their costs Deck (52):

1

## plant

### estb that performs one plus function in fabricating and distributing good/service

2

## firm

### organization employing resources to produce g/s for profits, operates one plus plants

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## industry

### group of firms producing same/similar producers

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## horizontally integrated plant

### several plants performing much of the same funcitonv

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## vertically integrated plant

### severla pplants performing diff functions in various stages of prod process

6

## stocks

### shares of ownership of a corporation, rights to vote and share in individuals

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## bonds

### lending money to a corporation for interest payment- iou, must be paid with interest, no corporate ownership on purchaser

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## coproations provide ____ to ownsers (stockholders)

### limited liability, risk only what they paid for theier stock, personal assets not at stake

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## economic cost of firm is

### sum of its explicit cost and implicit cost

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## implicit cost

### oc of using resources owned by firm to make firm's own product

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## explicit cost

### monetary payents firm makes to pruchase resouces it doesnt own, these are oc too bc every moneytary payment used to purchase outside resourees involved forgoing best alternative that couldve been purchased with money

12

## accounting profit

### total revenue minus explicit costs only

13

## economic profit

### accounting profit minus total ipmplict costs

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## explicit cost

### payment to resources frirm doesnt own

15

## implicit costs

### payment to resources firm owns- ownsers land labor capital entreprenureal opportunity

16

## economic profit equations

###
accounting profit minus implicit cost

total revenue minus economic cost

total revenue minus implicit and explicit cost

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## accounting profit equations

### total revenu minus explicit costs

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## explicit costs

### out of pocket, drect cost

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## accounting costs are equal to

### explicit costs

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## implicit costs

### value of resources alread yowend that could be used elsewhere

21

## total product (TP)

### total quatnity over total output of g/s produced

22

## marginal product (MP)

### change in total product over change in labor input

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## average product of labor (AP)

### total productivity over units of labor

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## law of diminishing returns is a ___phenonmen

### short term

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## marginal value is greater than avg value then

### avg is increasing

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## marginal value is less than avg value then avg

### is decreasing

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## marginal product of labor is

### change in tp over change in labor

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## average product is

### tp over labor

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## mp greater than ap, ap is

### increasing

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## mp less than ap, ap

### decreasing

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## ap interesects mp where

### ap is at max

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## tfc

### total fixed costs, costs that dont vary with changes in output

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## total variable cost tvc

### costs changing directly with level of output

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## total cost tc

### sum of fixed cost and variable cost at each level of output

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## fixed costs are

### unchanging

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## variable cost incraseas as ___ , vice versa

### increase as output increase

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## average fixed cost equation

### tfc/q

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## avg variable cost equation

### avc equals tvc/q

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## average total cost is

### tc/q or afc plus avc

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## marginal cost

### change in tc/ change in q or change in tvc / change in q

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## total production curve is

### relationship between variable resource and amt of input

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## mc curve intersects atc curve at _____ o fwhich curve

### min pt of atc curve

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## mc curve intersects avc curve at _____ of which curve

### min pt of avc curve

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## mc cuts through ____ at ____

### atc and avc, min pts

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## increasing returns to scale

### economies of scale, increase all inputs will cause more tha than proprotionate increase in output of other

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## decreasing returns to scale

### diseconomies of scale, increase in all inputs of one will cause less than proprotionate output of other

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## constant returns to scale

### constant

48

## all inputs and all costs are ___ in long run

### variable

49

## diseconomies of sscale slopes ___

### decreasing reutnrs ot scale, slopes up

50

## more economies of scale and less diseconomies of scale is what kind of scne

### small firms cant compete

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## more diseconomies of scale over economies of scale is what

### small producers exist

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