Micro Chap. 6

Designates the total amount of output produced, in physical units.

Measures total output divided by total units of an input.

Holds that we will get less and less extra output when we add additional units of an input, all other inputs held fixed

period of time in which firms can adjust production by changing variable factors but not fixed factors such as capital. / The short run is the period of time in which only some inputs, the variable inputs (e.g. workers), can be adjusted. In the short run, f xed factors, such as plant and equipment, cannot be fully modif ed or adjusted.

A period sufficiently long 0 that all factors, including capital, can be adjusted. / The long run is the period in which all factors (e.g. investing capacity) employed by the f rm, including capital, can be changed.

Different people are linked together through a particular medium.

Cost associated with an input that is fixed in the short run.

Consumers derive benefits from a number of other consumers who adopt the good