Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
Production function Fixed input Variable input Long run Total product curve Marginal product Diminishing returns to an input Fixed cost Variable cost Total cost Total cost curve Marginal Cost Average total cost Average cost U-shaped average total cost curve Average variable cost Minimum-cost output Long-run average total cost curve Increasing returns to scale Network externality Short run Average fixed cost Constant returns to scale Decreasing returns to scale | long-run average total cost declines as output increases the additional quantity of output produced by using one more unit of a given input the quantity of output at which the average total cost is lowest—the bottom of the U-shaped average total cost curve. a graphical representation that shows how the quantity of output depends on the quantity of the variable input, for a given quantity of the fixed input. an input whose quantity is fixed for a period of time and cannot be varied the time period in which all inputs can be varied the additional cost incurred by producing one more unit of a good or service the fixed cost per unit of output the sum of the fixed cost and the variable cost of producing a given quantity of output the relationship between the quantity of inputs a firm uses and the quantity of output it produces the effect observed when an increase in the quantity of an input, while holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input a cost that depends on the quantity of output produced; the cost of a variable input. total cost divided by quantity of output produced. Also referred to as average cost. a graphical representation of the total cost, showing how total cost depends on the quantity of output the increase in the value of a good to an individual is greater when a large number of others own or use the same good long-run average total cost increases as output increases a cost that does not depend on the quantity of output produced; the cost of a fixed input. a distinctive graphical representation of the relationship between output and average total cost; the average total cost curve falls at low levels of output, then rises at higher levels the time period in which at least one input is fixed an input whose quantity the firm can vary at any time the variable cost per unit of output an alternative term for average total cost; the total cost divided by the quantity of output produced long-run average total cost is constant as output increases a graphical representation showing the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output |
Production function, p. 182
Fixed input, p. 182
Variable input, p. 182
Long run, p. 182
Short run, p. 182
Total product curve, p. 182
Marginal product, p. 183
Diminishing returns to an input, p. 184
Fixed cost, p. 186
Variable cost, p. 186
Total cost, p. 186
Total cost curve, p. 187
Marginal cost, p. 189
Average total cost, p. 191
Average cost, p. 191
U-shaped average total cost curve, p. 192
Average fixed cost, p. 192
Average variable cost, p. 192
Minimum-cost output, p. 194
Long-run average total cost curve, p. 199
Increasing returns to scale, p. 200
Decreasing returns to scale, p. 200
Constant returns to scale, p. 201
Network externalities, p. 201