by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Average Variable Cost?The cost of producing a firm’s output depends on how much labor and physical capital the firm uses. A list of the costs involved in producing cars will look very different from the costs involved in producing computer software or haircuts...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What are Production Technologies? In planning for the long run, the firm will compare alternative production technologies (or processes). In this context, technology refers to all alternative methods of combining inputs to produce outputs. It does not refer to a...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Shape of the Average Long-Run and Short-Run Cost Curves? While in the short run firms are limited to operating on a single average cost curve (corresponding to the level of fixed costs they have chosen), in the long run when all costs are variable, they...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How do Costs relate to Diminishing Marginal Productivity? Adding additional factors of production (such as workers) generally leads to higher productivity. At some point, adding additional workers begins to add less and less productivity. Each factor of input has an...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Supply? Supply is the number or quantity of goods or service available for purchase or consumption within a market or economy.
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Rule of Maximizing Utility? When making purchases you should choose the item with the greatest marginal utility per dollar spent (i.e., the most bang for the buck). For a finite budget (limited funds to expend), and making a choice of the quantity of two...
