Midterm2_definitions_f07 - Definitions for Second Midterm...

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Definitions for Second Midterm Economics 304K:Principles of Microeconomics Prof. Meg Ledyard This list contains the vocabulary for the second midterm. There will be no separate definitions section. However, a strong command of these definitions will help with solving problems. Cost Definitions Total Revenue (TR) – The amount a firm receives for the sale of its output. Total Cost (TC) – The market value of the inputs a firm uses in production. Profit ( π ) – Total revenue minus total cost. Explicit costs – input costs that require an outlay of money by the firm. Implicit costs – input costs that do not require an outlay of money by the firm (opportunity costs). Economic Profit – Total revenue minus explicit costs minus implicit costs Accounting Profit – Total revenue minus explicit costs Production Function – The relationship between quantity of inputs used to make a good, and the quantity of output of that good. Marginal Product
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Midterm2_definitions_f07 - Definitions for Second Midterm...

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