Economics of Production: Terms and Definitions, Quizzes of Managerial Economics

Download Economics of Production: Terms and Definitions and more Quizzes Managerial Economics in PDF only on Docsity! TERM 1 Technology DEFINITION 1 The process a firm uses to turn inputs into outputs of goods and services. TERM 2 Technological Change DEFINITION 2 A change in the ability of a form to produce a given level of outputs with a given quantity of inputs. TERM 3 Total Cost DEFINITION 3 The costs of all inputs a firm uses in production. TERM 4 Variable Costs DEFINITION 4 Costs that change as output changes. TERM 5 Fixed Costs DEFINITION 5 Costs that remain constant as output changes.TC= FC+VC TERM 6 Opportunity Cost DEFINITION 6 The highest-valued alternative that must be given up toengagein an activity. TERM 7 Explicit Cost DEFINITION 7 A cost the involves spending money. TERM 8 Implicit Cost DEFINITION 8 Anon-monetaryopportunity cost. TERM 9 Production Function DEFINITION 9 The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs. TERM 10 Average Total Cost DEFINITION 10 Total cost divided by the quantity of output produced. TERM 21 Diseconomies of Scale DEFINITION 21 The situation when a firms long-run average costs rise as the firm increases output. TERM 22 Isoquant DEFINITION 22 A curve that shows all thecombinationsof two inputs, such as capital and labor, that will produce the same level of output. TERM 23 Marginal Rate of Technical Substitution (MRTS) DEFINITION 23 the rate at which a firm is able to substitute one input for another while keeping the level of output constant. TERM 24 Isocost Line DEFINITION 24 All the combinations of two inputs, such as capital and labor, that have the same total cost. TERM 25 Expansion Path DEFINITION 25 A curve that shows a firms cost-minimizing combination of input for every level of output. TERM 26 The cost-minimizing combinations of inputs depends on.... DEFINITION 26 Technology and Input Price.