1. Look at the total product curve and determine where there are increasing returns to scale, decreasing returns to scale and constant returns to scale.
2. Know the formulas for calculating AVC, AFC, and ATC. Be able to convert AVC, ATC, and AFC into VC, TC, and FC.
3. Calculate ATC when given data.
4. Define the short run.
5. Define, calculate, and interpret marginal cost.
6. Be able to draw the LRATC for a firm.
7. Define and interpret the total product curve.
8. The slope of the total cost curve is marginal cost. The slope of the total product curve is marginal product. Be able to calculate average product and explain the relationship between MP and AP. Be able to calculate the marginal product.
9. Define “fixed input”.
10. What are “economies of scale” and “diseconomies of scale”? What is the slope of the LRATC when a firm faces diseconomies of scale?
11. Be able to explain “diminishing marginal returns” and show on a graph.