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Illustrate the production function algebraically and explain its components.
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What does the production function specify?
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Define the short run. Define the long run.
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What is the difference between fixed versus variable costs? Provide several examples of each.
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Explain the difference between the short and long run.
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Define marginal cost.
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Explain the law of diminishing returns.
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Define marginal product.
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Define and illustrate average fixed cost, variable cost and total cost.
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The long run average cost curve is the envelope of what? Illustrate this.
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Explain the difference between economies of scale, diseconomies of scale and constant returns to scale. Illustrate each with the appropriate cost curve.
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Economies of scale may be traced to what factors?
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An industry characterized by increasing returns to scale is called what?
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Define minimum efficient scale.
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Define both the law of supply and the price elasticity of supply.
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What is the difference between economic versus accounting profits? Explain why this difference is important.
