Term
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Definition
| output or yield is often called total physical |
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Term
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Definition
| The average amount of output produced per unit of input used |
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Term
| Marginal Physical Product |
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Definition
| The addition TPP produced using an additional unit of input BITCHES |
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Term
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Definition
| change in revenue from producing and selling one more unit of output |
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Term
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Definition
| change in cost from producing one more unit |
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Term
| MC and MR profit max decision rule |
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Definition
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Term
| If output and input prices are constant... |
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Definition
| then MPP should equal the input price/output price |
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Term
| MVP (Marginal Value Product) |
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Definition
change in revenue from increasing input use by one unit
-How does the input add value to the product marginally???? |
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Term
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Definition
| The cost of buying one more unit of input |
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Term
| Decision rule for MVP and MIC |
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Definition
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Term
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Definition
| an input may be limited so that the profit-max point cannot be reached for all possible uses |
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Term
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Definition
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Term
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Definition
| manager must choose which input combos are the most profitable, bc most products require more than one input |
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Term
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Definition
| Tells you which type of input substitution you have (easily seen when graphed) and whether not substitution is even possible |
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Term
| decision rule about Input substitution ratio |
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Definition
| input substitution ratio=input price ratio |
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Term
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Definition
| Tells you which type of input substitution you have (easily seen when graphed) and whether not substitution is even possible |
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Term
| decision rule about Input substitution ratio |
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Definition
| input substitution ratio=input price ratio |
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Term
| Constant rate of substitution |
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Definition
| all of one input or nothing of the other to get least-cost |
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Term
| Decreasing rate of stubstituion |
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Definition
| least-cost option will include some of each input |
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Term
| Enterprises and what a manager needs to know |
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Definition
an enterprise is essentially the processes of making a product, and all that goes into it.
A farm manager often has the ability to produce more than one good
This means he/she must choose which combination will be the most profitable, while taking into account the amount of resources available for each and the limits that come with that |
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Term
| Types of Enterprise relationships |
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Definition
*determine this to figure out which combo of enterprises to produce
Competitive
Supplementary
Complementary |
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Term
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Definition
| one enterprise's output cannot increase w/out decreasing another enterprise's output |
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Term
| Supplementary enterprises |
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Definition
| one enterprise's output can increased w/out affecting the other enterprise's output |
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Term
| Complementary enterprises |
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Definition
| as one enterprise's output increases, so does the other |
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Term
| Competitive enterprises may have what two kinds of substitution? |
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Definition
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Term
| output substitution ratio tells you... |
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Definition
| the ratio of what you lost and the output of what you gained |
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Term
| Output Profit Ratio tells you... |
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Definition
| the ratio of how much money you made from increasing one enterprise and decreasing another |
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Term
| Decision Rule for output sub ratio and output price ratio |
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Definition
| output substitution ratio= output ratio |
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Term
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Definition
-not included in accounting expenses
-must take into account when hiring and/or using technology
-once an input has been acquired, it may have one or more alternative uses
*decide which alternative is the most profitable |
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Term
| In what kinds of areas do you run into opportunity cost decisions? |
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Definition
-labor
-management
-capital |
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Term
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Definition
| -further classification of fixed costs |
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Term
| examples of cash expenses |
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Definition
anything cash is used to pay for!!! (not an opportunity cost issue)
Sometimes interest and insurance (if risk of loss is assumed by company) |
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Term
| examples of noncash expenses |
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Definition
-any time an opportunity cost is in question
-some variable costs
-insurance (if risk of loss is assumed by owner) |
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Term
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Definition
| that period in which the available quantity of one or more production inputs is fixed and cannot be changed |
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Term
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Definition
| that period during which the quantity of all necessary productive inputs can be changed |
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