Download Microeconomics Terms: Utility, Marginal Utility, Equilibrium, Production, Costs and more Quizzes Introduction to Econometrics in PDF only on Docsity!
total
utility
the total satisfaction you derive from consumption; this could refer to either your total utility of consuming a particular good or your total utility from all consumption TERM 2
marginal
utility
DEFINITION 2 In economics, the marginal utility of a good or service is the utility gained (or lost) from an increase (or decrease) in the consumption of that good or service. TERM 3
law of diminishing marginal
utility
DEFINITION 3 the more of a good a person cunsumes per period, the smaller the increase in total utility from consuming one more unit, other things constant TERM 4
consumer equilibrium
DEFINITION 4 the condition in which an individual consumer's budget is spent and the last dollar spent on each good yields the same marginal utility therefore, utility is maximized TERM 5
marginal valuation
DEFINITION 5 the dollar value of the marginal utility derived from consuming each additional unit of a good
consumer surplus
the difference between the most a consumer would pay for a given quantity of a good and what the consumer actually pays TERM 7
explicit cost
DEFINITION 7 opportunity cost of resources employed by a firm that takes the form of cash payments TERM 8
implicit costs
DEFINITION 8 a firm's opportunity cost of using its own resources or those provided by its owners without a corresponding cash payment TERM 9
accounting profit
DEFINITION 9 a firms total revenue minus its explicit costs TERM 10
economic profit
DEFINITION 10 a firm's total revenue minus its explicit and implicit costs
Production Function
the relationship between the amount of resources employed and a firm's total product TERM 17
marginal product
DEFINITION 17 In economics, the marginal product or marginal physical product is the extra output produced by one more unit of an input (for instance, the difference in output when a firm's labour is increased from five to six units). TERM 18
increasing marginal returns
DEFINITION 18 the marginal product of a variable resource increases as each additional unit of that resource is employed TERM 19
law of diminishing marginal returns
DEFINITION 19 as more of a variable resource is added to a given amount of a fixed resource, marginal product eventually declines and could become negative. TERM 20
fixed cost
DEFINITION 20 In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business They tend to be time-related, such as salaries or rents being paid per month.
variable cost
Variable costs are expenses that change in proportion to the activity of a business. TERM 22
total cost
DEFINITION 22 In economics, and cost accounting, total cost (TC) describes the total economic cost of production and is made up of variable costs, which vary according to the quantity of a good produced and include inputs such as labor and raw materials, plus fixed costs, which are independent of the quantity of a good produced and include inputs (capital) that cannot be varied in the short term, such as buildings and machinery. sum of fixed and variable cost or TC = FC + VC TERM 23
Marginal Cost
DEFINITION 23 In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. MC = change in total cost divided by the change in quatitiy TERM 24
average variable cost
DEFINITION 24 Average variable cost (AVC) is an economics term that refers to a firm's variable costs (labor, electricity, etc.) divided by the quantity (Q) of output produced. TERM 25
Average Total cost
DEFINITION 25 total cost divided by output, or ATC = TC/ Q Sum of the fixed and variable cost
