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 Short run Total product curve Marginal product Diminishing returns to an input Fixed cost Variable cost Total cost Total cost curve Average total cost Average cost U-shaped average total cost curve Average fixed cost Average variable cost Minimum-cost output Long-run average total cost curve Increasing returns to scale Decreasing returns to scale Constant returns to scale | the fixed cost per unit of output. 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. the quantity of output at which the average total cost is lowest—the bottom of the U-shaped average total cost curve. long-run average total cost declines as output increases (also referred to as economies of scale). a graphical representation of the production function, showing how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input. total cost divided by quantity of output produced. Also referred to as average cost. the relationship between the quantity of inputs a firm uses and the quantity of output it produces. a cost that does not depend on the quantity of output produced; the cost of a fixed input. long-run average total cost increases as output increases (also known as diseconomies of scale). the additional quantity of output produced by using one more unit of a given input. 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. the time period in which at least one input is fixed. a distinctive graphical representation of the relationship between output and average total cost; the average total cost curve at first falls when output is low and then rises as output increases. the variable cost per unit of output. an alternative term for average total cost; the total cost divided by the quantity of output produced. the sum of the fixed cost and the variable cost of producing a given quantity of output. a cost that depends on the quantity of output produced; the cost of a variable input. an input whose quantity the firm can vary at any time (for example, labor). the time period in which all inputs can be varied. a graphical representation of the total cost, showing how total cost depends on the quantity of output. long-run average total cost is constant as output increases. an input whose quantity is fixed for a period of time and cannot be varied (for example, land). |