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CFA Level 1 Economics
·
Module 3
The Firm: Production and Costs
1
Understanding Profit: Accounting vs. Economic
Distinguish between accounting profit, economic profit, and normal profit.
2
Productivity Metrics: Total, Average, and Marginal Product
Define and calculate total product, average product, and marginal product of labor.
3
Diminishing Returns and Production
Explain the law of diminishing marginal returns and its effect on production.
4
Understanding and Calculating Production Costs
Define and calculate total cost, fixed cost, variable cost, average cost, and marginal cost.
5
Short-Run vs. Long-Run Average Cost Curves
Describe the relationship between short-run and long-run average cost curves.
6
Understanding Scale: Economies, Diseconomies, and MES
Explain economies of scale, diseconomies of scale, and minimum efficient scale.
7
Marginal Revenue and Profit Maximization
Define marginal revenue and determine the profit-maximizing output rule (MR=MC).
Previous module
Elasticity and Its Applications
Next module
Market Structures: Perfect and Monopolistic Competition