Short Run Costs 7.3-11 ~ Benjamin Rainwater Flashcards Preview

Econ 2106 Exam 2 > Short Run Costs 7.3-11 ~ Benjamin Rainwater > Flashcards

Flashcards in Short Run Costs 7.3-11 ~ Benjamin Rainwater Deck (12):
1

An increase in the price of the variable input results in...

AVC (average variable cost),
ATC (average total cost) and MC (marginal cost) moving up together

2

When variable price increases, do the curves change shape?

No

3

An increase in the price of the fixed input results in

only the ATC moving up

4

An improvement in technology shifts one or more of the cost curves down/up?

down

5

Average Variable Cost (AVC)
and Average Total Cost (ATC)
are u-shaped curves and the
vertical difference between them
is?

Average Fixed Costs (AFC)

6

AFC (average fixed cost)
decreases/increases as quantity
increases?

decreases

7

AFC (average fixed cost)
and this decreases as quantity
increases intersect at what point?

at their minimum
points by Marginal Cost (MC),
which slopes upward.

8

If the price of the fixed input
increases only the (?) moves
upwards

ATC curve

9

If technology improves one or
more of the cost curves move downward/upward?

downward

10

The difference between ATC and AVC is?

AFC

11

ATC means

Average Total Costs

12

AFC+AVC=

ATC