Production & Costs

Costs that appear in a firms accounts. These are "out of pocket" costs. eg: wages, rent, utilities.

_ _ _ _ _ _ _ _ costs

The income a firm generates from selling its products.

Total _ _ _ _ _ _ _ = price x quantity sold.

Larger firms can generally produce at a lower average cost than smaller firms in the long term due to

• Diminishing Marginal Productivity

• Diseconomies of scale

• Economies of scale

• Diminishing returns to scale

What law explains how, in the short term, as a firm adds more variable inputs into production eventually the additional output decreases.

• Diminishing marginal productivity

• Diminishing variable productivity

• Diminishing average productivity

• Diminishing marginal costs

_ _ _ _ _ costs are costs that are required before production starts and do not change in the short term

Whatever a firms output, _ _ _ _ _ must be above average cost for the firm to make a profit

To calculate a firms _______ ____ total cost must be divided by output

• marginal cost

• average cost

• factor payments

• variable cost

A mathematical equation that tells us how much output a firm can produce given its inputs

What graph is shown here

• Total cost curve

• Marginal cost curve

• Total product curve

• Marginal product curve

What graph is shown here?

• Total cost curve

• Marginal cost curve

• Total product curve

• Marginal product curve