ECON101 Lecture Notes - Lecture 11: Pepperoni, Cash Register, Fixed Cost

38 views2 pages

violetmuskrat44

4 Aug 2018

School

University of Delaware

Department

Economics

Course

ECON101

Professor

Jens Schubert

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

The process a firm uses to convert inputs into outputs. The sellers problem: technology - recipe, costs - dough, cheese, pepperoni, tomatoes, oven, marco, revenue - how much can i sell a slice for. Technology - the basic activity of a firm is to use inputs (workers, machines, and raw materials) to produce outputs of goods/services. Technological change - is the change in a firm"s ability to produce a given level of output with a given quantity of inputs. The short run is a period of time during which at least one of the firm"s inputs is fixed ex: a firm might have a long-term lease on a factory that is too costly to get out of. In the long run, the firm can change all its inputs: adopt new technology, increase/decrease the size of its physical plant. Total cost is the cost of all inputs a firm uses in production.

Related Questions

Short-run costs are calculated with at least one input fixed and thus with a fixed cost. Long-run costs are calculated with all the inputs variable.

Provide examples and explanations of some of the following short-run and long-run circumstances of "typical" firms:

1) A firm with a small capacity to produce relative to the demand in the market;

2) A firm with a large capacity to produce relative to the demand in the market;

3) A firm that experiences economies of scale as it increases its plant capacity;

copperelk393

11. [3 Marks] Assume no change in the LRATC.? All firms in a perfectly competitive market have access to the same technology and input prices. Production entails a $1000 per period fixed cost. A firm sells 1000 units a price of $10, incurring an average of $8 per unit in variable costs. A. The firm must increase output to increase short-run profits. B. The firm must decrease output to increase short-run profits. C. Assuming this firm is maximizing short run profits, it will produce less in future periods as the market price will decrease in the long run. D. Assuming this firm is maximizing short run profits, it will produce more in future periods as the market price will increase in the long run. E. Assuming this firm is maximizing short run profits, it will continue to produce 1000 units in the long run.

constant costs

increasing returns to scale

constant returns to scale

isocost curve

decreasing returns to scale

isoquant

diseconomies of scale

long-run average cost

economies of scale

long-run marginal cost

economies of scope

marginal rate of technical substitution

expansion path

short-run expansion path

___A curve that displays all the various combinations of inputs that will produce a given amount of output.

___The rate at which one input is substituted for another along an isoquant.

___Line that shows all the possible combinations of inputs that can be purchased for a given total cost.

___A curve showing all of the cost-minimizing levels of input usage for various levels of output.

___When the usage of all inputs is increased by an equal proportionate amount, output ___increases by exactly the same proportion.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a larger proportionate amount.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a smaller proportionate amount.

___Cost per unit in the long run.

___The change in long-run total cost per unit change in output.

___When long-run average cost falls as output increases.

___When long-run average cost increases with increases in output.

___Long-run average and marginal costs are equal for all levels of output.

___The situation in which the joint cost of producing two goods is less than the sum of the separate costs of producing the two goods.

___Horizontal line showing the cost-minimizing input combinations for various output levels when capital is fixed in the short run.

aquamarineguinea-pig889

ECON101 Lecture Notes - Lecture 11: Pepperoni, Cash Register, Fixed Cost

Document Summary

Get access

Related Documents

ECON101 Lecture Notes - Lecture 11: Diminishing Returns, Marginal Product, Marginal Cost

ECON101 Lecture Notes - Lecture 6: Ceteris Paribus, Marginal Cost, Production Function

ECON101 Chapter Notes - Chapter 6: Average Variable Cost, Average Cost, Marginal Revenue

Related Questions