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HEDGE FUND: A mutual fund that relies heavily on hedging practices to protect the value of the financial assets. Such a fund specializes in options, futures, and other financial instruments that provide insurance protection against price fluctuations, and thus limits the risk of loss.
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Lesson 15: Cost | Unit 3: Four More Measures
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Page: 16 of 24
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In this unit, you should have learned about:- How the three measures of total cost are used to derived three corresponding measures of average cost, average total cost, average fixed cost, and average variable cost.
- That average fixed cost declines with the quantity of output produced, but that both average total cost and average variable cost follow a pattern of decrease, increase.
- Plotting curves to represent the three average cost measures -- yielding the average total cost curve, average fixed cost curve, and average variable cost curve.
- The negative slope of AFC curve and the U-shape of the AVC and the ATC curves. And that the increasing portions of the AVC and ATC curves is indirectly due to the law of diminishing marginal returns.
- That the ATC curve is the vertical summation of the AFC and AVC curves.
- Marginal cost as the change in either total cost or total variable cost resulting from a change in the quantity of output produced.
- That marginal cost also displays a pattern of decrease then increase, with the increasing portion due to the law of diminishing marginal returns.
- The marginal cost curve as the plot of marginal cost values, which is also U-shaped, and which directly reflecting the law of diminishing marginal returns.
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TOTAL REVENUE, PERFECT COMPETITION The revenue received by a perfectly competitive firm for the sale of its output. Total revenue is one two bits of information a perfectly competitive firm needs to calculate economic profit, the other is total cost. In general, total revenue is the price times quantity--the price received for selling a good times the quantity of the good sold at that price. For a perfectly competitive firm, which receives a single unchanging price for all output sold, the calculation is relatively easy. Two other revenue measures directly related to total revenue are average revenue and marginal revenue. Total revenue is often depicted as a total revenue curve.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time driving to a factory outlet seeking to buy either a rim for your spare tire or decorative celebrity figurines. Be on the lookout for letters from the Internal Revenue Service.
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This isn't me! What am I?
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The average bank teller loses about $250 every year.
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"Inside the ring or out, ain't nothing wrong with going down. It's staying down that's wrong. " -- Muhammad Ali
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GARP
Generalized Axioms of Revealed Preference
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