AP Microeconomics: Production, Costs, and Industry Structure flashcards

Question 1

What is total cost divided by the quantity of output called?

Accepted Answer

Average total cost

Question 2

What is variable cost divided by the quantity of output called?

Accepted Answer

Average variable cost

Question 3

What term describes expanding all inputs in the same proportion without changing the average cost of production?

Accepted Answer

Constant returns to scale

Question 4

What general rule says that as a firm employs more labor, eventually the additional output produced declines?

Accepted Answer

Diminishing marginal productivity

Question 5

What is it called when the long-run average cost of producing output rises as total output rises?

Accepted Answer

Diseconomies of scale

Question 6

What is total revenue minus total costs, explicit plus implicit, called?

Accepted Answer

Economic profit

Question 7

What is it called when the long-run average cost of producing output falls as total output rises?

Accepted Answer

Economies of scale

Question 8

What are a firm's out-of-pocket costs called?

Accepted Answer

Explicit costs

Question 9

What are the resources firms use to produce their products, such as labor and capital, called?

Accepted Answer

Factors of production (inputs)

Question 10

What is the cost of a firm's fixed inputs called?

Accepted Answer

Fixed cost

Question 11

What are factors of production that cannot easily be increased or decreased in a short period of time called?

Accepted Answer

Fixed inputs

Question 12

What is the opportunity cost of resources a firm already owns and uses in its business called?

Accepted Answer

Implicit costs

Question 13

What is the period of time during which all of a firm's inputs are variable called?

Accepted Answer

The long run

Question 14

What is the additional cost of producing one more unit called?

Accepted Answer

Marginal cost

Question 15

What is the change in a firm's output when it employs more labor called?

Accepted Answer

Marginal product

Question 16

What is the mathematical equation that tells how much output a firm can produce with given amounts of inputs called?

Accepted Answer

Production function

Question 17

What is income from selling a firm's product, price times quantity sold, called?

Accepted Answer

Revenue

Question 18

What is the period of time during which at least one of a firm's inputs is fixed called?

Accepted Answer

The short run

Question 19

What is the sum of fixed and variable costs of production called?

Accepted Answer

Total cost

Question 20

What is the cost of production that increases with the quantity produced called?

Accepted Answer

Variable cost

Question 21

What are factors of production that a firm can easily increase or decrease in a short period of time called?

Accepted Answer

Variable inputs

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