Economics Chapter 4 Key Terms

What does the term "Supply" refer to in economics?

• The amount of a product consumers are willing to purchase at various prices

• The desire and ability to produce and sell a product

• The total amount of a product available in the market

• The regulation of product distribution by the government

What is the "Law of supply"?

• It states that consumers are willing to buy more of a good or service at a higher price than they are at a lower price

• It states that the government mandates the supply of goods at a certain price level

• It states that producers are willing to sell more of a good or service at a higher price than they are at a lower price

• It states that supply remains constant regardless of the price

What is a "Supply schedule"?

• A list of government regulations on the production of goods

• A table that shows the demand for a good or service at each price

• A table that shows how much of a good or service an individual producer is willing and able to offer for sale at each price in a market

• A financial plan for managing production costs

What does "Marginal product" mean?

• The average product produced by each worker

• The change in total product that results from hiring one more worker

• The maximum product that can be produced by a worker

• The minimum product required to break even in production

What is "Specialization" in the context of production?

• The process of making a product unique in the market

• The diversification of production to reduce risks

• Having each worker focus on a particular facet of production

• The development of specialized machinery for production

What are "Fixed costs"?

• Costs that vary depending on the amount of product produced

• Costs that are determined by the market supply schedule

• Costs that remain constant regardless of the level of production

• Costs that are fixed by government regulations

What are variable costs?

• The price of the resources needed to produce a good or service

• Business costs that vary as the level of production output changes

• A tax on the production or sale of a specific good or service

• The additional cost of producing one more unit of their product

How is total cost calculated?

• By subtracting variable costs from fixed costs

• By adding fixed and variable costs together

• By multiplying the marginal cost with the number of units produced

• By dividing total revenue by the quantity of products sold

What does marginal cost represent?

• The cost of the last unit sold

• The cost of the first unit produced

• The additional cost of producing one more unit of their product

• The average cost of producing the units of product

What is marginal revenue?

• The total revenue divided by the number of units sold

• The cost of producing one additional unit of a product

• The added revenue per unit of output, or the money made from each additional unit sold

• The revenue generated from the sale of all units of a product