Flowers Vocab 1

Created by lzmullis12 

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Accounting

the occupation of maintaining and auditing records and preparing financial reports for a business

Average Fixed Cost

fixed cost divided by the quantity of output

Average Total Cost

total cost divided by the quantity of output

Average Variable Cost

variable costs divided by the quantity of output

Average Product

total output divided by total units of the variable factor of production

Constant Returns to Scale

the property whereby long-run average total cost stays the same as the quantity of output changes

Decreasing (Marginal Returns)

when the marginal product of an additional worker is less than the marginal product of the previous worker

Diminishing Marginal Returns

a level of production in which the marginal product of labor decreases as the number of workers increases

Diseconomy of Scale

Long run concept where a firm loses profit through its expansion due to communication and marginal costs

Economic Profit

Total revenue minus total cost, including both explicit and implicit costs

Economy of Scale

the saving in cost of production that is due to mass production

Firm

members of a business organization that owns or operates one or more establishments

Fixed Cost

a periodic charge that does not vary with business volume (as insurance or rent or mortgage payments etc.)

Increasing (Marginal) Returns

a level of production in which the marginal product of labor increases as the number of workers increases

Long Run

A period of sufficient time to alter all factors of production used in the productive process - all inputs can be changed.

Long Run Average Total Cost

A curve that indicates the lowest average cost production at each rate output when size or scale of the firm varies. It is also called the planning curve.

Marginal Cost

the additional cost to a firm of producing one more unit of a good or service

Normal Profit

the payment made by a firm to obtain and retain entrepreneurial ability; the minimum income entrepreneurial ability must receive to induce it to perform entrepreneurial functions for a firm

Marginal Product

the extra output or change in total product caused by the addition of one more unit of variable input

Production Function

The relationship between quantity of inputs used to make a good and the quantity of output of that good

Profit

the money a business receives for its products or services over and above its costs

Short Run

a period of time sufficiently short that at least one of the firm's factors of production cannot be varied

Total Cost

the sum of fixed costs plus variable costs

Total Product

all the goods and services produced by a business during a given period of time with a given amount of input`

Variable Cost

a cost that rises or falls depending on how much is produced

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