ECON 101 Chapter 9

A payment that must be made to obtain and retain the services of a resource; the income a firm must provide to a resource supplier to attract the resource away from an alternative use; equal to the quantity of other products that cannot be produced when resources are instead used to make a particular product.

The monetary payment a firm must make to an outsider to obtain a resource.

The monetary income a firm sacrifices when it uses a resource it owns rather than supplying the resource in the market; equal to what the resource could have earned in the best-paying alternative employment; includes a normal profit.

The payment made by a firm to obtain and retain entrepreneurial ability; the minimum income entrepreneurial ability must receive to induce it to perform entrepreneurial functions for a firm.

The total revenue of a firm less its economic costs (which include both explicit costs and implicit costs); also called "pure profit" and "above-normal-profit."

In microeconomics, a period of time in which producers are able to change the quantities of some but not all of the resources they employ; a period in which some resources (usually plant) are fixed and some are variable.

A period of time long enough to enable producers of a product to change the quantities of all the resources they empoly; period in which all resources and costs are variable and no resources or costs are fixed.

The total output of a particular good or service

The additional output produced when 1 additional unit of a resource is employed (the quantity of all other resources employed remaining constant); equal to the change in total product divided by the change in the quantity of a resource employed.

The total output produced per unit of a resource employed (total product divided by the quantity of that employed resource).

The principle that as successive increments of a variable resource are added to a fixed resource, the marginal product of the variable resource will eventually decrease.

Any cost that in total does not change when the firm changes its output; the cost of fixed resources.

A cost that in total increases when the firm increases its output and decreases when the firm reduces its output.

The sum of fixed cost and variable cost

A firm's total fixed cost divided by output (the quantity of product produced).