Short Run Costs 7.3-1&2 ~ Benjamin Rainwater Flashcards Preview

Econ 2106 Exam 2 > Short Run Costs 7.3-1&2 ~ Benjamin Rainwater > Flashcards

Flashcards in Short Run Costs 7.3-1&2 ~ Benjamin Rainwater Deck (12):
1

Variable costs (VC) are

costs that change with the amount of output being produced.

2

To calculate the variable costs (VC) for
producing a product, you need two pieces of
information. What is the first one?

1. the amount of labor needed to produce a
given amount of output

3

To calculate the variable costs (VC) for
producing a product, you need two pieces of
information. What is the second one?

2. the wage that you have to pay to get that
amount of labor

4

Wage is

a payment to an employee for labor services.

5

VC=

Labor x number of employees

6

Variable costs (VC) can be graphed by plotting

ariable cost and different outputs on a
two-dimensional graph.

7

Inefficient points are excluded/included from the graph

excluded

8

inefficient points are

those in which
additional workers cause total product to fall.

9

At some point the VC curve starts going
backward. What are the points that are receding on the x axis?

Inefficient Points

10

At the maximum output, you extend the
VC curve

vertically to represent that that was the maximum output.

11

The Variable Cost curve is (?) shaped

S

12

Labor x variable labor costs=

VC