(See related pages)
Below are the key terms featured in this chapter. The textbook's full glossary is also available for online searching.
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| accounting profit | the excess of a business's total revenue over its explicit costs (See page(s) 87) |
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| average cost | the sum of average fixed cost and average variable cost at each quantity of output (See page(s) 94) |
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| average fixed cost | the fixed cost per unit of output (See page(s) 94) |
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| average product | the quantity of output produced per worker (See page(s) 88) |
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| average variable cost | the variable cost per unit of output (See page(s) 94) |
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| business | an enterprise that brings individuals, financial resources, and economic resources together to produce a good or service for economic gain (See page(s) 85) |
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| capital-intensive process | a production process that employs more capital and less labour (See page(s) 85) |
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| constant returns to scale | a situation in which a percentage increase in all inputs results in an equal percentage increase in output (See page(s) 98) |
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| decreasing returns to scale | a situation in which a percentage increase in all inputs causes a smaller percentage increase in output (See page(s) 98) |
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| economic costs | a business's total explicit and implicit costs (See page(s) 87) |
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| economic profit | the excess of a business's total revenue over its economic costs (See page(s) 87) |
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| explicit costs | payments made by a business to businesses or people outside of it (See page(s) 86) |
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| fixed costs | economic costs for inputs that remain fixed at all quantities of output (See page(s) 92) |
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| fixed inputs | inputs whose quantities cannot be adjusted in the short run (See page(s) 88) |
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| implicit costs | the owner's opportunity costs of being involved with a business (See page(s) 86) |
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| increasing returns to scale | a situation in which a percentage increase in all inputs causes a larger percentage increase in output (See page(s) 97) |
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| inputs | the resources used in production (See page(s) 85) |
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| labour-intensive process | a production process that employs more labour and less capital (See page(s) 85) |
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| law of diminishing marginal returns | at some point, as more units of a variable input are added to a fixed input, the marginal product will start to decrease (See page(s) 90) |
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| long-run average cost | the minimum short-run average cost at each possible level of output (See page(s) 99) |
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| marginal cost | the extra cost of producing an additional unit of output (See page(s) 92) |
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| marginal product | the extra output produced by an additional worker (See page(s) 89) |
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| normal profit | the minimum return necessary for owners to keep funds and their entrepreneurial skills in their business (See page(s) 86) |
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| output | the quantity of a good or service that results from production (See page(s) 85) |
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| production | the process of transforming a set of resources into a good or service that has economic value (See page(s) 85) |
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| productive efficiency | making a given quantity of output at the lowest cost (See page(s) 85) |
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| total cost | the sum of all fixed and variable costs at each quantity of output (See page(s) 92) |
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| total product | the overall quantity of output produced with a given workforce (See page(s) 88) |
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| variable costs | economic costs for inputs that vary at each quantity of output (See page(s) 92) |
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| variable inputs | inputs whose quantities can be adjusted in the short run (See page(s) 88) |