1. Unit 3 – The story so far Three key areas: Revenues Costs Profit

2. Revenues Define the following: -Total revenue -Average revenue -Marginal revenue Draw and label a ‘normal’ average revenue and marginal revenue curve and write a quick explanation.

3. Costs Define the following: -Economic cost -Fixed cost -Variable cost -Semi-variable cost Draw and label a ‘normal’ short run average fixed cost, average variable cost and marginal cost and write a quick explanation.

4. What is the law of diminishing returns?

5. Explain this:

6. Profit Define the following: -Break even point -Normal profit -Supernormal profit -MC=MR Draw and label a ‘normal’ MC and MR diagram, showing a decrease in costs and a decrease in revenue and write a quick explanation. What is the ‘shut down point’ in the short run?