Exam #3 - Econ Exam 3 Review OVERVIEW OF NOTES Short run...

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OVERVIEW OF NOTES Short run The time period in which at least one input is fixed (usually capital) and all others (usually just labor) is variable We are contracted to a certain level of capital We can hire and fire workers as we feel necessary In the short run capital is fixed The machines are in the store and it is hard to get more machines are give up any Marginal productivity Additional output from an additional unit of input Costs in the short run We are interested in costs not necessarily the actual productivity Costs in the short run Fixed inputs- fixed costs Variable inputs-variable costs Total costs = Fixed cost +variable cost Average cost = average fixed cost + average variable cost Total cost curve is shifted up by fixed costs Marginal cost Additional cost of producing an additional unit of the good The slope of the total cost curve The change in cost given a change in output TV = FC+VC ATC=AFC+AVC Average Variable Cost Consider GPA You start with a 3.00 You take ECO201 and get a C Your GPA falls Get an A Your GPA rises Average Variable and Marginal Cost MC <AVC - the average falls MC > AVC - the average rises MC = AVC – no change
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Exam #3 - Econ Exam 3 Review OVERVIEW OF NOTES Short run...

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