studyguide_for_ch6

studyguide_for_ch6 - Outline of Chapter 6 1. Understand the...

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Outline of Chapter 6 1. Understand the basic knowledge about a business firm (refer to my question in class note.) 2. Explain the difference between the short-run and long-run problem for the firm. 3. Define and graph total and marginal product, and describe the relationships between these concepts. 4. State the law of diminishing returns 5. Distinguish between the different types of costs: explicit versus implicit costs, and fixed versus variable costs. 6. Explain why sunk costs should be ignored when making current decisions and how it is used. 7. Define and graph total cost, total fixed cost and total variable cost. 8. Define and graph average total cost , average fixed cost and average variable cost . 9. Define marginal cost curve and show how it changes as production increases, and explain its relationship with average total cost, average variable cost. 10. State the least-cost rule and explain how it is used. 11. How do we get the long-run average total cost curve by using short-run average total cost curve? Explain how a firm moves from one point to another along its long-run average total cost curve. 12. Explain the shape of the long-run average total cost curve in terms of economies of scale, constant returns to scale, and diseconomies of scale. Sample Questions:
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This test prep was uploaded on 04/07/2008 for the course ECON 202 taught by Professor Guokai during the Spring '07 term at Ole Miss.

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studyguide_for_ch6 - Outline of Chapter 6 1. Understand the...

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