Micro Economics Definitions .3 0.0 / 5 ? EconomicsThe company, revenue and costsASAQA Created by: SophCreated on: 03-04-16 18:01 Production This is the process of converting inputs or factor services into outputs of goods and services 1 of 20 Short-run production This occurs when a firm adds variable factors of production to fixed factors of production 2 of 20 Long-run production This occurs when a firm changes the scale of all the factors of production 3 of 20 Productivity Output per unit of input 4 of 20 Labour productivity Output per worker 5 of 20 Capital productivity Output per unit of capital 6 of 20 Specialisation This is when a worker only performs one tasks or a narror range of tasks 7 of 20 Division of labour This is a form of specialisation in which different workers perform different tasks in the course of producing a good or service 8 of 20 Trade The buying and selling of goods and services 9 of 20 Exchange Money is a medium of exchange 10 of 20 Total cost Fixed cost + Variable cost 11 of 20 Average cost This is the total cost of production divided by output 12 of 20 Economies of scale As output increases, long-run average cost decreases 13 of 20 Diseconomies of scale As output increases, long-run average cost rises 14 of 20 Long-run average cost Long-run total cost divided by output 15 of 20 Internal economy of scale These are the costs saved resulting from the growth of the firm itself 16 of 20 External economy of scale These are the costs saved resulting from the growth of the market of which the firm is a part 17 of 20 Total revenue PxQ 18 of 20 Average total revenue Total Revenue/ Output. 19 of 20 Profit This is the difference between total revenue and total costs of production 20 of 20
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