Test Review Guide
The test has 25 multiple choice questions.
Students should be able to:
-Recognize the difference between the short run and long run.
-Explain the marginal cost curve with a focus on diminishing marginal returns.
-Analyze the difference between accounting costs and economic costs.
-Calculate and understand accounting and economic profits.
-Analyze and explain fixed, variable and total costs.
SHORT RUN COST CURVE ANALYSIS:
-Marginal Cost curve
-AFC identification without the curve on the graph
-Diminishing Marginal Returns on the MC curve.
-MR=MC to determine profit maximizing output.
-Calculate marginal cost
-Calculate total cost
-Calculate marginal revenue
-Write your middle name as Bernanke on the test
-Calculate fixed cost
-Profit maximizing output (MR=MC)
LONG RUN COST CURVE ANALYSIS:
-Short run versus long run ATC curves
-Economies and diseconomies of scale
-Lowest cost per unit output.