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Stack #1211955
| Question | Answer |
|---|---|
| Inputs for a business are the goods and services that it sells to its customers | false |
| Outputs are always goods | false |
| Cost is what a business receives after subtracting expenses from revenue | false |
| Marginal cost is the added expense of producing one more unit of output | true |
| Businesses have two types of cost: fixed and variable | true |
| Marginal revenue is the additional revenue a business gets from producing or selling one more unit of input | false |
| money that customers pay for the output of a business | revenue |
| goods and services that are used to produce outputs for a business | inputs |
| money that a business pays for its inputs | cost |
| difference between revenue and cost | profit |
| main objective of a business in a market economy | profit maximization |
| Input used by a business in the production process | labor |
| main goal of most businesses | maximize profits |
| The hours of work supplied by various types of workers | labor |
| The long-lived physical equipment and structures that a business uses in its production process are called | capitol |
| The technology or knowledge necessary for the production process is called | business know-how |
| technology is _____ in the equipment a company buys | embodied |
| In a lawn-mowing business where you have a push mower and labor as input, by adding capital, what would be the impact on output | output would increase |
| The extra amount of output a business can generate by adding one more hour of labor | marginal product |
| add too many inputs a business may experience | diminishing marginal product |
| The price of labor per unit times the amount of labor | labor cost |
| The total cost of production | Labor, capital and land intermediate inputs business know-how |
| ______ shows the potential cost for each level of output | The cost function |
| The added expense of producing one more unit of output | marginal cost |
| Marginal cost ________ with quantity produced | rises |
| Variable costs are also known as | short term cost |
| An example of variable costs | hourly labor |
| Variable costs are relevant for | short-term everyday decision making |
| The short-term cost function assumes that | Fixed costs can't be changed. |
| In short-run profit maximization, businesses focus on the ______, holding fixed costs constant | short-term cost function |
| In the process of long-term profit maximization, the business makes decisions under the assumption that it can | vary all the inputs |
| The __________ summarizes the output of the business, given the level of inputs | production function |
| Which of the following is an example of a profit-maximizing business | An accountant who makes her living preparing tax returns for other people. |
| Theodore can make 6 pizzas in one hour. If Theodore's labor has a diminishing marginal product, what must be true about the number of pizzas that Theodore can make in three hours | It must be less than 18 |
| What happens to the marginal product of labor if more capital is added to a production process | More capital generally causes the marginal product of labor to rise |
| If Sara can produce 25 muffins for a total cost of $15, but her production process is subject to increasing marginal costs, which of the following could be the total cost of producing 100 muffins? | 80 |
| Fixed costs are also known as __________ costs because they are much harder for a business to change. | long term |
| When a business expands production and increases sales, what generally happens to revenue | Revenue rises because the business is selling more output. |
| As the market price of a good rises, businesses will respond by producing more of that good because | marginal revenue exceeds marginal cost after the price increase. |
| In the real world markets are perfectly competitive | false |
| `under President John F. Kennedy, the United States expanded its highway system | false |
| In 1971 President Richard Nixon announced a 90-day freeze on wage and price increases to stem economic stagflation | true |
| Deregulation began with the oil price shock | true |
| inefficiency of taxation means that imposing a tax on a good or service typically | reduces the amount produced |
| the WPA government agency that | increased employment through construction projects |
| The New Deal was | legislation passed by the Roosevelt administration |
| The Public Broadcasting Service and National Public Radio are examples | nonprofit government-funded organizations |
| United States has one of the __________ public sectors | smallest |
| example of the government command approach | Public schools |
| The Wage and Price Controls of 1971 example of | command approach intervention |
| The original research that culminated in the Internet was sponsored by | The Defense Department |
| The era of deregulation began | 1970's |
| Rent-seeking behavior can cause | corruption in public officials |
| The inefficiency of taxation | imposing a tax on goods typically reduces the amount produced. |
| What happens to the market price that buyers face as a result of taxation | It is greater than before the tax was imposed |
| voluntary associations that provide public goods and benefit but do not pay for it | free-rider problem |
| government sets the rules for market competition | Market regulation |
| The Uniform Commercial Code governs | commercial transactions between companies and consumers |
| The Federal Reserve Board is responsible for | supervising the financial and monetary system |
| The Federal Trade Commission is responsible for enforcing | antitrust law |
| The U.S. Consumer Product Safety Commission is responsible for | regulating the flammability of mattresses |
| The New Deal legislation passed by President Roosevelt was inspired by | the Great Depression |
| The disadvantages of government intervention include | incentive problems |
| The unintentional impact that the actions of an individual can have on others is called: | an externality |
| Imposing a tax on a market typically hurts | both buyers and sellers |
| The potential profit from new technological advancements and innovations | Gives the private sector a better incentive to commercialize new technologies |
| The laws that prevent companies from unfairly trying to get market power or reduce the amount of competition in a market | antitrust laws. |
| person's actions harm others economists call | negative externality |
Created by:
kmorquecho