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| | *'''variable inputs''' (inputs that are increased to produce more Q in the short run) | | *'''variable inputs''' (inputs that are increased to produce more Q in the short run) |
| | *'''fixed inputs''' (inputs that cannot be increased in the short run to produce more Q) | | *'''fixed inputs''' (inputs that cannot be increased in the short run to produce more Q) |
| − | *'''returns to scale''' (increasing, decreasing or constant? Look at whether output Q increases for increase in input I) Note that "economies to scale" is the same as "increasing returns to scale." | + | *'''returns to scale''' (increasing, decreasing or constant? Look at whether a firm's long run average total costs -- AVC=TC/Q -- increases when the firm's size increases) Note that "economies of scale" is the same as "increasing returns to scale"; "diseconomies of scale" is the same as "decreasing returns to scale." |
| | *'''income effect''' | | *'''income effect''' |
| | *'''substitution effect''' | | *'''substitution effect''' |
| | + | *'''normal good''' |
| | *'''inferior good''' (a good that sees a decrease in demand when income increases, and vice-versa) | | *'''inferior good''' (a good that sees a decrease in demand when income increases, and vice-versa) |
| | *'''marginal product''' (increase in output due to additional input: Q = sum MP) | | *'''marginal product''' (increase in output due to additional input: Q = sum MP) |
| − | *'''law of diminishing marginal return''' | + | *'''law of diminishing marginal utility''' |
| | *'''perfect competition''' (know the conditions for it) | | *'''perfect competition''' (know the conditions for it) |
| | *'''In a perfectly competitive market ...''' | | *'''In a perfectly competitive market ...''' |
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| | *'''condition for shutting down''' (P<AVC in short run or P<ATC in long run) | | *'''condition for shutting down''' (P<AVC in short run or P<ATC in long run) |
| | *'''Coase theorem''' | | *'''Coase theorem''' |
| | + | *'''Giffen good''' |
| | *'''mathematical solutions''' and '''specific calculations''' | | *'''mathematical solutions''' and '''specific calculations''' |
| | | | |