{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Exam3 - Flashcards - The flashcards are formatted for...

Info icon This preview shows pages 1–19. Sign up to view the full content.

View Full Document Right Arrow Icon
Total Revenue – Total Cost Maximize Profit
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Firm’s goal (assumed). Profit equation:
Image of page 2
Total Cost Total Revenue
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The amount a firm receives from the sale of its output. The market value of the inputs a firm uses in production.
Image of page 4
Implicit Costs Explicit Costs
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Require an outlay of money (e.g. paying wages to workers). No cash outlay (e.g. opportunity cost of owner’s time).
Image of page 6
Economic Profit Accounting Profit
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Total revenue minus total explicit cost. Total revenue minus total cost (includes explicit and implicit costs).
Image of page 8
Production Function Table; Equation; Graph
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Production functions can be represented by a ____, ____, or ____. Relation between the quantities of inputs used to produce a good, and the quantity of output of that good.
Image of page 10
∆ Quantity ∆ Labor Marginal Product
Image of page 11

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The increase in output arising from an additional unit of that input, holding all other inputs constant. Equation for marginal product of labor (MPL):
Image of page 12
Marginal Product of Labor (MPL) Increase at decreasing rate
Image of page 13

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Shape of marginal product of labor (MPL) curve. Slope of the production function.
Image of page 14
Diminishes; Rises 1. Costs rise by the wage paid to workers 2. Output rises by MPL
Image of page 15

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
When an employer hires an extra worker: Marginal product of labor (MPL) ____ while labor ____.
Image of page 16
Total Cost Diminishing Marginal Product
Image of page 17

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Marginal product of an input declines as the quantity of the input increases (other things equal).
Image of page 18
Image of page 19
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern