ECON 110 EXAM 3 QUESTIONS
COMPLETE WITH 100% VERIFIED
ANSWERS
\.total revenue - ANSWERS✔-the amount a firm receives from the sale of its
output
\.total cost - ANSWERS✔-the market value of the inputs a firm uses in production
\.explicit costs - ANSWERS✔-require an outlay of money (paying a worker)
\.Implicit costs - ANSWERS✔-do not require a cash outlay (opportunity cost of the
owner's time)
\.Accounting profit - ANSWERS✔-total revenue minus total explicit costs
\.economic profit - ANSWERS✔-total revenue minus total costs (including explicit
and implicit costs)
\.production function - ANSWERS✔-demonstrates the relationship between the
quantity of inputs used to produce a good and the quantity of output of that good
, \.marginal product - ANSWERS✔-the increase in output arising from an additional
unit of that input, holding all other inputs constant
\.diminishing marginal product - ANSWERS✔-the marginal product of an input
declines as the quantity of the input increases (other things equal)
\.marginal cost - ANSWERS✔-increase in total cost from producing one more unit
\.fixed costs - ANSWERS✔-do not vary with the quantity of output produced
\.variable costs - ANSWERS✔-vary with the quantity produced
\.average total cost - ANSWERS✔-total cost divided by the quantity of output
\.efficient scale - ANSWERS✔-the quantity that minimizes ATC
\.costs in the short run - ANSWERS✔-some inputs are fixed; the costs of these
inputs are FC
\.costs in the long run - ANSWERS✔-all inputs are variable; ATC at any Q is cost per
unit using the most efficient mix of inputs for that Q
\.economies of scale - ANSWERS✔-ATC falls as Q increase
COMPLETE WITH 100% VERIFIED
ANSWERS
\.total revenue - ANSWERS✔-the amount a firm receives from the sale of its
output
\.total cost - ANSWERS✔-the market value of the inputs a firm uses in production
\.explicit costs - ANSWERS✔-require an outlay of money (paying a worker)
\.Implicit costs - ANSWERS✔-do not require a cash outlay (opportunity cost of the
owner's time)
\.Accounting profit - ANSWERS✔-total revenue minus total explicit costs
\.economic profit - ANSWERS✔-total revenue minus total costs (including explicit
and implicit costs)
\.production function - ANSWERS✔-demonstrates the relationship between the
quantity of inputs used to produce a good and the quantity of output of that good
, \.marginal product - ANSWERS✔-the increase in output arising from an additional
unit of that input, holding all other inputs constant
\.diminishing marginal product - ANSWERS✔-the marginal product of an input
declines as the quantity of the input increases (other things equal)
\.marginal cost - ANSWERS✔-increase in total cost from producing one more unit
\.fixed costs - ANSWERS✔-do not vary with the quantity of output produced
\.variable costs - ANSWERS✔-vary with the quantity produced
\.average total cost - ANSWERS✔-total cost divided by the quantity of output
\.efficient scale - ANSWERS✔-the quantity that minimizes ATC
\.costs in the short run - ANSWERS✔-some inputs are fixed; the costs of these
inputs are FC
\.costs in the long run - ANSWERS✔-all inputs are variable; ATC at any Q is cost per
unit using the most efficient mix of inputs for that Q
\.economies of scale - ANSWERS✔-ATC falls as Q increase
