Economic Concepts Flashcards

Front

Measures how much extra output is produced when one more worker is added.

Back

MPL (Marginal Product of Labor)

Formula: ΔQ/ΔL OR ΔOutput/ΔL OR ΔTP/ΔL

Front

Calculates how much output, on average, is made by each worker.

Back

APL (Average Product of Labor)

Formula: Q/L OR Output/L OR TP/L

Front

The sum of fixed and variable costs.

Back

TC (Total Cost)

Formula: FC + VC

Front

The additional cost of making one more unit of output.

Back

MC (Marginal Cost)

Formula: ΔTC/ΔQ

Front

The total cost divided by the quantity of output produced.

Back

ATC (Average Total Cost)

Formula: TC/Q

Front

The variable cost divided by the quantity of output produced.

Back

AVC (Average Variable Cost)

Formula: VC/Q

Front

The fixed cost divided by the quantity of output produced.

Back

AFC (Average Fixed Cost)

Formula: FC/Q

Front

Inputs that can be changed in the short run to change production, such as labor and certain materials/supplies.

Back

Variable Inputs

Front

Inputs that cannot be changed in the short run to change production, typically physical capital.

Back

Fixed Inputs

Front

The maximum potential level of production, depending on the amount of physical capital available.

Back

Plant Capacity