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