Econ 102 Study Guide Questions/Answer 2025/2026 Graded A+ Suppose a firm has a monopoly on the scale of a computer game and faces a downward-sloping demand curve. When selling the 36th game, the firm will always receive? - Less marginal revenue on the 36t

Econ 102 PSU Study Questions/Answer 2025/2026
Graded A+
Unseen Costs - Opportunity Costs or Potential Income Given Up

Total Cost (TC) Equation - Fixed Costs (FC) + Variable Costs (VC)

Marginal Costs (MC) Equation - Change in Total Cost

Profit Equation From Graph - (Price x Quantity) - (Average Total Cost x Quantity) or
Quantity(Price - Average Total Cost)

Factors of Production - Labor: Works and Hours
Capital: Machinery, Equipment, Facilities

Marginal Product - Change in Total Output Produced When a Unit of Labor or Capital is
Added

Diminishing Marginal Returns - As Input Increase, The Marginal Returns Decrease Over
Time Due to Specialization

Profit Is Maximized When... - - Marginal Revenue (MR) = Marginal Cost (MC)
- Produce until negative marginal effects

What is Revenue.. - Income earned by a firm

Fixed Costs (FC) - Constant Costs that don't change (ex: rent)

Variable Costs (VC) - Costs that change as output changes

Total Cost (TC) - Fixed + Variable Costs

Average Total Costs (ATC) - Total Costs / Quantity

Average Variable Costs (AVC) - Variable Costs / Quantity

Average Cost Curves are... - U shaped due to diminishing marginal returns and
specialization

Economies of Scale - - When a firm increases its output and costs decrease due to
specialization
- MR is greater than MC

Constant Returns to Scale - - When a firm increases its output and costs increase as
much as revenue costs increase