Short-Run Costs 7.3-10 Hunter Parrott Flashcards Preview

Econ 2106 Exam 2 > Short-Run Costs 7.3-10 Hunter Parrott > Flashcards

Flashcards in Short-Run Costs 7.3-10 Hunter Parrott Deck (15):
1

The average cost curves summarize unit costs and ___________.

PRODUCTIVITY

2

The _____ curves are mirror images of the productivity curves.

Costs

3

The important average cost curves are ___, ___, and ___.

AFC, AVC, ATC

4

Each of these is calculated by dividing the appropriate cost by _____ ____

Total Product

5

AFC=

FC/TP

6

AVC=

VC/TP

7

ATC=

(VC+FC)/TP

8

In the decreasing portion of the average cost curves on the left, costs fall because

1. increasing output is spreading the fixed costs over more units; thus, average fixed—and therefore average total—costs are falling;
2. additional workers are increasingly productive.

9

In the _________ portion of the total cost curves on then left, costs are increasing because additional workers are less productive than the previous ones.

increasing

10

Even though fixed costs (FC) remain the same, the ______ ___ are increasing at an increasing rate

Variable costs

11

The vertical difference between the ATC curve and the AVC curve is the area between the two curves. This area is?

AFC

12

as production _________, the AFC shrinks

increases

13

In the rising portion of the ATC curve, AVC is increasing faster than AFC is falling, thus pushing the ATC curve (up, down).

up

14

When AVC and ATC are falling, MC must be _____ the average cost curves

below

15

MC intersects the average cost curves at the average cost curves’ _______ points

minimum