Economics Chapter 5 Review Test Questions – Flashcards
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When the rate of increase in total production is starting to slow down, the firm is operating
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in stage 2 of production
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The supply of a product normally decreases if
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government subsides are removed
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Rent payments and property taxes would be counted as
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fixed costs
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The level of profit maximizing output is reached when marginal cost is
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equal to marginal revenue
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Many businesses are engaging in e-commerce because
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fixed costs are minimal
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When producers offer fewer products for sale at each and every price
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the supply curve has shifted to the left
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The theory of production deals with the relationship between the factors of production and
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the output of goods and services
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Total cost is the sum of
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the fixed and variable costs
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Which of the following will cause the market supply curve to shift?
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a change in the number of sellers offering the product
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Profits will be maximized when marginal revenue
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equals marginal cost
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extra cost when a business produces one additional unit
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marginal cost
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government payment to encourage or protect an economic activity
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subsity
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cost a business incurs even if there is little or no activity
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fixed cost
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graph that shows different quantities of a product offered at various prices by all firms that offer the product for sale
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market supply curve
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graph showing the various quantities supplied at all possible prices
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supply curve
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period of production long enough for adjustments in all productive resources
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long run
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equals the number of units sold, multiplied by the average price per unit
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total revenue
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production level where total cost equals total revenue
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break-even point
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cost that changes when the rate of operation or output changes
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variable cost
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situation in which suppliers offer different amounts of products for sale at all possible prices
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change in supply
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principle that suppliers will normally offer more for sale at high prices and less at low prices
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law of supply
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sum of the fixed and variable costs
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total
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electronic business or exchange conducted over the internet
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e-commerce
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stage where output increases at a decreasing rate as more units of a variable input are added
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diminishing returns
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period of production so brief that only the variable inputs can be changed
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short run
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measure of the way in which quantity supplied responds to changes in price
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supply elasticity
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total fixed costs
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overhead
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amount of a product that producers bring to market at a given price
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quantity supplied
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amount of a product that producers bring to market at a given price
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Supply
