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25 terms

Flowers Vocab 1

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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