Short Run Costs 7.3-8 ~ Benjamin Rainwater Flashcards Preview

Econ 2106 Exam 2 > Short Run Costs 7.3-8 ~ Benjamin Rainwater > Flashcards

Flashcards in Short Run Costs 7.3-8 ~ Benjamin Rainwater Deck (12):
1

The short run is

a brief period of time during which only one input can be varied.

2

Fixed inputs are

inputs in the production process that do not change with changes in output. Examples are machinery and factories.

3

Variable inputs are

inputs that can be changed when output changes. Usually labor is the only variable input.

4

Total fixed costs (FC) are

short-run costs that that do not vary with output.

5

Average fixed costs (AFC) are

fixed costs divided by total output.

6

Average variable costs (AVC) are

variable costs divided by total output.

7

Average total costs (ATC) are

the summation of AFC and AVC.

8

average
fixed costs decrease as total product (TP)...

increases

9

To graph average total costs (ATC), you
must get the vertical summation of

AFC and
AVC.

10

The ATC curve will always be lower/higher than the AVC curve?

Higher

11

The ATC curve is always lower/higher than the AFC curve?

Higher

12

ATC curve is what shaped?

U shaped.