Question

Below are nineteen concepts, 1-19, and nineteen definitions, A-S. Match each definition to its concept by writing the correct letter the following way: 1A, 2B etc.

____    1.         Long run

____    2.         Short run

____    3.         Sunk cost

____    4.         Fixed cost

____    5.         Explicit cost

____    6.         Implicit cost

____    7.         Accounting profit

____    8.         Economic profit

____    9.         Total revenue

____    10.       Total costs

____    11.       Variable costs

____    12.       Marginal revenue, MR

____    13.       Marginal cost, MC

____    14.       Average cost

____    15.       Zero (normal) profits

____    16.       Increasing cost industry

____    17.       Constant cost industry

____    18.       Decreasing cost industry

____    19.       Elimination principle

____    20.       Risk

____    21.       Uncertainty

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A         An industry in which industry costs do not change with greater output

B          A cost that does not require an outlay of money

C          An industry in which industry costs increase with greater output

D         Total revenue minus explicit costs

E          Price times quantity sold

F          Costs that do vary with output

G          The change in total revenue from selling an additional unit

H         A cost that does not vary with the quantity produced

I           The time after all exit or entry has occurred

J           An industry in which industry costs decrease with an increase in output

K         These occur when P = AC

L          The change in total cost from producing an additional unit

M         The cost per unit, i.e., the total cost of producing Q units divided by Q

N         According to Frank H. Knight, this was insurable

O         Total revenue minus total costs, including implicit opportunity costs

P          The period before exit or entry can occur

Q         The costs of producing a given quantity of output

R          Above normal-profits are eliminated by entry and below-normal profits are eliminated by exit

S          A cost that requires a money outlay

T         A cost that cannot be recovered

U         According to Frank H. Knight, this was uninsurable

Answer 1

A . An industry in which industry costs do not change with greater output: Constant cost industry.

B. A cost that does not require an outlay of money: Implicit cost.

C. An industry in which industry costs increase with greater output: Increasing cost industry.

D. Total revenue minus explicit costs: Accounting profit.

E. Price times quantity sold : Total revenue.

F. Costs do vary with output : Variable cost.

G. The change in total revenue from selling an additional unit: Marginal revenue ,MR.

H.  A cost that does not vary with the quantity produced: Fixed cost.

I.  The time after all exit or entry has occurred: Long run.

J. An industry in which industry costs decrease with an increase in output: Decreasing cost industry.

K.  These occur when P=AC : Zero (normal profits).

L.  The change in total cost from producing an additional unit: Marginal cost, MC.

M.  The cost per unit, i.e., the total cost of producing Q units divided by Q : Average cost.

N.  According to Frank H. Knight, this was insurable : Risk.

O.   Total revenue minus total costs, including implicit opportunity costs: Economic profit.

P. The period before exit or entry can occur: Short run.

Q.  The costs of producing a given quantity of output: Total cost.

R.  Above normal-profits are eliminated by entry and below-normal profits are eliminated by exit: Elimination principle.

S. A cost that requires a money outlay: Explicit cost.

T.  A cost that cannot be recovered: Sunk cost.

U.  According to Frank H. Knight, this was uninsurable: Uncertainty