AGECON 2
Terms
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- The total output of goods or services produced by the firm during the current period.
- Total physical product
- The level of output or total product produced by a business per unit of input used.
- Average physical product
- The change in output or total product the business would achieve in the current period by expanding the use of an input by another unit
- Marginal physical product
- the change in total cost of production as the output or total product of the business is expanded.
- Marginal cost
- The change in the revenue earned. (from the production if the business is expanded)
- Marginal revenue
- the level of revenue earned per unit of output as the production of the business is expanded.
- Average Revenue
- The change in the revenue earned by the business as it employs an additional unit of a resource, holding other resource use constant.
- Marginal value product
- Much like the budet line for consumers, this line reflects the particular level of expenditure for two inputs. The slope of ___ is t
- Iso-cost line
- a curve that reflects the combinations of two inputs that will produce a specific level of output.
- Isoquant
- The rate of substitution or trade-off between two inputs in the production of a specific product; also represents the slope of an isoquant curve.
- Marginal rate of technical substitution
- the cost of capital broadly defined: the price you would have to pay to rent all the inputs used to produce the business’s product.
- Rental rate of capital
- the technically efficient combination of two products a business can produce in the current period given its existing resources and technology.
- Production Possibilities Frontier
- A measure of the savings achieved by consumers at the current market price from the price they would have been willing to pay for a specific quantity o
- Consumer surplus
- a measure of the economic rent or returns above total costs accruing to businesses participating in a market during the current period.
- Producer surplus
- The sum of producer surplus and consumer surplus
- Total economic surplus
- The amount by which the quantity demanded at a given price exceeds the quantity supplied.
- Commodity or market shortage
- The amount by which the quantity supplied at a given price exceeds the quantity demanded.
- Commodity or market surplus
- Percent change in quantity supplied with respect to a percent change in the price of the product.
- Elasticity of supply
- that level of output at which average total costs equal average revenue or market price
- Breakeven level of output
- that level of output at which average variable costs equal average revenue or the market price.
- Shutdown level of output
- a product that is made different from others through advertising or quality variation.
- Differentiated product
- A market structure in which a large number of firms produce a differentiated product. Relatively easy to enter such a sector.
- Monopolistic competition
- A market structure in which there are a small number of sellers.
- Oligopoly
- Social costs of imperfect competition
- Dead-weight loss