Micro Ch_7 Vocab Review Flashcards

Front

Accounting profit

Back

Total revenues minus explicit costs, including depreciation.

Front

Average profit

Back

The profit divided by the quantity of output produced. Also known as profit margin.

Front

Average total cost (ATC)

Back

The total cost divided by the quantity of output. AC = \frac{TC}{Q}

Front

Average variable cost (AVC)

Back

The variable cost divided by the quantity of output.

Front

Constant returns to scale

Back

The point at which expanding all inputs does not change average cost of production.

Front

Depreciation

Back

A calculation that accounts for the loss of value of goods over time.

Front

Diminishing marginal productivity

Back

A rule that as more labor is employed, the additional output produced declines.

Front

Diseconomies of scale

Back

The long run average cost of producing output increases as total output increases.

Front

Economic profit

Back

Total revenues minus total costs (explicit and implicit costs).

Front

Economies of scale

Back

The area of the Long Run Average Cost curve where the long-run average cost decreases as output increases.