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1. Digital Study Guide, written by William Walstad
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After reading this chapter, you should be able to:

1. Explain why economic costs include both explicit (revealed and expressed) costs and implicit (present but not obvious) costs.
2. Relate the law of diminishing returns to a firm's short-run production costs.
3. Describe the distinctions between fixed and variable costs and among total, average, and marginal costs.
4. Use economies of scale to link a firm's size and its average costs in the long run.