pre comp Flashcards
Who is your economist?
Peter Leeson
What is a fixed cost?
A cost that can not change.
What is a variable cost?
A cost that can change.
What is a barrier to entry?
It is when a company starts but other companies try to stop them with the entry.
What is a monopoly?
A good that is distributed by one source.
What will attract other firms to a market?
The firm has to be zero economic profit.
What is the equation of average total cost?
(total cost) divided by (quantity of output).
What is diminishing marginal returns?
As we add more variable inputs to a production process
the marginal productivity of that input goes down.
What is the equation of profit?
Revenue minus cost.
What is a short-run?
A time period in production that can not be changed.
What is a long-run?
A planning period in which anything can be changed.
What is a revenue?
Money a firm makes for goods or services.
What is a cost?
What a firm gives up to make a good.
What is accounting cost?
The amount of money a company pays for it’s inputs.
What is an economic cost?
The benefit the firm would have received from using it’s
resources to make a different good.
