Economics Key Concepts

1. ___ is the quantity of a product that producers are willing.

• supply

• demand

• price

• cost

According to the 2. ______ when price increases, quantity supplied increases, and when price decreases, quantity supplied decreases.

• law of supply

• law of demand

• law of diminishing returns

• law of equilibrium

Quantity supplied can be displayed on a chart called a 3. ______ or on a graph called a 4. ______.

• supply schedule, supply curve

• demand schedule, demand curve

• price list, price graph

• inventory chart, inventory graph

The change in total product that results from hiring one more worker is called the ______ _____.

• Total output

• Marginal product

When marginal product begins to decrease, production is in the stage of ______.

• increasing returns

• diminishing returns

• negative returns

• constant returns

Total cost is the sum of 8. ______ and variable costs.

• fixed

• moving

• nonvariable

9. ______ is the additional cost of producing one more unit.

• Marginal cost

• Fixed cost

• Average cost

• Total cost

When marginal cost equals 10, a company has reached ______.

• a break-even point

• a profit-maximizing level of output

• a loss-minimizing level of output

• an equilibrium point

A 12. ______ occurs when producers are willing to sell different amounts of a product at every price.

• change in supply

• change in demand

• equilibrium price

• market shortage

The six factors that change supply are input costs, 13. ______, technology, government action, producer expectations, and number of producers.

• labor productivity

• consumer demand

• market trends

• advertising strategies