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Econ 210 Final Review

Terms in this set (84)

Industrial Organization
the study of how firms' decisions about prices and quantities depend on the market conditions they face
Profit
The financial gain made in a transaction
Profit Equation
total revenue - total cost
Total Revenue (TR)
the total money received from the sale of a product
TR
Price x Quantity
Total Cost (TC)
the market value of the inputs a firm uses in production
opportunity cost
whatever must be given up to obtain some item
explicit costs
input costs that require an outlay of money by the firm
implicit costs
input costs that DO NOT require an outlay of money by the firm
TC
EC + IC
economic profit
TR-TC
accounting profit
total revenue - explicit costs
production function
the relationship between quantity of inputs used to make a good and the quantity of output of that good
marginal product
the increase in output that arises from an additional unit of input
diminishing marginal product
the marginal product of an input declines as the quantity of the input increases
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