PHASE 2 - Adobe Ch. 6 -Businesses and their costs Flashcards Preview

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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

3

industry

group of firms producing same/similar producers

4

horizontally integrated plant

several plants performing much of the same funcitonv

5

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

7

bonds

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

8

coproations provide ____ to ownsers (stockholders)

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

9

economic cost of firm is

sum of its explicit cost and implicit cost

10

implicit cost

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

11

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

14

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

17

accounting profit equations

total revenu minus explicit costs

18

explicit costs

out of pocket, drect cost

19

accounting costs are equal to

explicit costs

20

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

23

average product of labor (AP)

total productivity over units of labor

24

law of diminishing returns is a ___phenonmen

short term

25

marginal value is greater than avg value then

avg is increasing

26

marginal value is less than avg value then avg

is decreasing

27

marginal product of labor is

change in tp over change in labor

28

average product is

tp over labor

29

mp greater than ap, ap is

increasing

30

mp less than ap, ap

decreasing

31

ap interesects mp where

ap is at max

32

tfc

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

33

total variable cost tvc

costs changing directly with level of output

34

total cost tc

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

35

fixed costs are

unchanging

36

variable cost incraseas as ___ , vice versa

increase as output increase

37

average fixed cost equation

tfc/q

38

avg variable cost equation

avc equals tvc/q

39

average total cost is

tc/q or afc plus avc

40

marginal cost

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

41

total production curve is

relationship between variable resource and amt of input

42

mc curve intersects atc curve at _____ o fwhich curve

min pt of atc curve

43

mc curve intersects avc curve at _____ of which curve

min pt of avc curve

44

mc cuts through ____ at ____

atc and avc, min pts

45

increasing returns to scale

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

46

decreasing returns to scale

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

47

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

51

more diseconomies of scale over economies of scale is what

small producers exist

52

Minimum Efficient Scale (MES)

lowest level of output at which firm can minimize long run avg costs