Short-Run Costs 7.3-1-Marie Smith Flashcards Preview

Econ 2106 Exam 2 > Short-Run Costs 7.3-1-Marie Smith > Flashcards

Flashcards in Short-Run Costs 7.3-1-Marie Smith Deck (12):
1

What are the costs of production?

Variable cost, fixed cost, average cost, and marginal cost.

2

What are variable costs?

The cost of hiring the variable input (labor) needed to produce a given amount of output.

3

What are the two things you need to know to calculate the variable costs for producing a product?

1. You need to know the amount of labor needed to produce a given amount of output. 2. The amount you have to pay to get a unit of labor.

4

The amount of labor a firm needs to produce a given quantity of output, is what kind of information?

It is technological information about productivity.

5

How much you have to pay to get a unit of labor, is what kind of information?

It is economic information.

6

How do you determine variable cost?

# of workers x amount you have to pay 1 worker.

7

Define wage?

A payment to an employee for labor services.

8

If it takes 2 workers to produce 20 tvs, and the wage rate is $1000 per week for each worker, what would the variable cost be?

V C= $1000 x 2= $2000 per week

9

What tells us how much labor we need to produce a given quantity of product?

The total product of the firm.

10

What is another way of saying; the "labor costs" of producing a given number of units?

The variable cost of producing a given quantity of units.

11

# of workers x wage paid to those workers = ?

Total amount of money the fim has to spend on labor to produce output.

12

Suppose the wage to for a worker is $2000, to produce 30 TV's you need to hire 3 workers. Calculate the variable costs of producing 30 TV's.

V C = $6000