Econ flashcards (chapter 2)
Terms
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- average cost minimization
- Activity level that generates the lowest average cost, MC = AC
- breakeven point
- Output level at which total profit is zero
- dependent variable
- Y variable determined by X values
- equation
- Analytical expression of functional relationships
- graph
- Visual representation of data
- incremental change
- Total difference resulting from a decision
- incremental profit
- Gain or loss associated with a given managerial decision
- independent variable
- X variable determined separately from the Y variable
- inflection point
- Point of maximum or minimum slope
- marginal
- Change in the dependent variable caused by a 1-unit change in an independent variable
- marginal cost
- Change in total cost following a 1-unit change in output
- marginal profit
- Change in total profit due to a 1-unit change in output
- marginal revenue
- Change in total revenue associated with a 1-unit change in output
- optimal decision
- Choice alternative that produces a result most consistent with managerial objectives
- profit maximization
- Activity level that generates the highest profit, MR = MC and M? = O
- revenue maximization
- Activity level that generates the highest revenue, MR = 0
- slope
- Measure of the steepness of a line
- spreadsheet
- Table of electronically stored data
- table
- List of economic data
- tangent
- A straight line that touches a curve at only one point