1. ECON3
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The Theory of Production
Short Run Production
Answer all the questions below
1. Define all of the following terms:
a. Total Costs
b. Fixed Costs
c. Variable Costs
d. Short Run
e. Long Run
f. Marginal Product
2. Explain why a firm in the short run will experience diminishing
marginal returns
3. Explain the concept of depreciation
4. Explain the term productive efficiency
5. Explain the term optimal output
6. Draw a cost curve diagram showing the following curves
a. Marginal Cost
b. Average Total Cost
c. Average Variable Costs
d. Average Fixed Costs