Types of Costs and Revenues
Costs that businesses pay, which changes based on how much a business produces are called
Variable costs
The third stage of production where every additional worker adds less output than the worker before
Negative marginal returns
Look at the chart and graph on the front of Topic 3 Review Part 2.
What is the quantity demanded at a price of $4?
400 cheeseburgers
What is the profit-maximizing quantity of output, which is the amount all businesses always want to produce at unless they get their smallest loss by producing nothing?
MR = MC
What is a movement along the demand curve called due to a change in price?
Change in quantity demanded
What is the extra revenue collected by a business for selling one more unit of output, which is the same as the selling price?
Marginal revenue
The amount of extra product made by adding one more input, usually one more worker
Marginal product of labor
Look at the chart and graph on the front of Topic 3 Review Part 2.
What price corresponds with a quantity demanded of 100 cheeseburgers?
$7
The law of demand states that if you lower the price of an item that people will buy:
More of it
What is it called when the actual supply curve shifts due to a change in something other than price of the item?
Change in supply
a cost that a business pays, which remains the same, no matter how much a business produces
Fixed costs
The second stage of production where every additional worker adds more output, but less additional output than the worker before
Decreasing/diminishing marginal returns
Look at the chart and graph on the front of Topic 3 Review Part 2.
What happens if the price of a cheeseburger decreases from $3 to $2
Quantity demanded increases from 500 cheeseburgers to 600 cheeseburgers
How are total costs calculated?
Fixed cost plus variable cost
What is the change in the amount of items offered for sale when the price changes?
Change in quantity supplied
What is the extra cost of producing one more unit of output?
Marginal cost
The first stage of production where every additional worker adds more additional output, than the worker before
Increasing marginal returns
Look at the chart and graph on the front of Topic 3 Review Part 2.
What would happen if the price of cheeseburgers remains $4, but the quantity demanded changes to 300 due to an increaese in price for fries, a complement for cheeseburgers?
Demand curve shifts left
How is elasticity of demand calculated?
by dividing the percent change in quantity demanded by the percent change in price
What is a movement of the demand curve due to a change in a factor other than price?
Change in demand
What is total cost divided by quantity produced?
Average cost
Look at question 14 on Topic 3 Review Part 4
Hiring the 5th worker is considered
Decreasing/diminishing marginal returns
Look at the chart and graph on the back of Topic 3 Review Part 3.
What happens if the price of cheeseburgers decreases from $6 per cheeseburger to $4 per cheeseburger?
Quantity supplied decreases from 600 cheeseburgers to 400 cheeseburgers
The law of supply states that if you increase the price of an item that businesses will produce:
More of it
If the price of a product decreases, how is the supply curve affected?
Decrease in quantity supplied
What is total revenue?
all the revenue that a business receives
Look at question 14 on Topic 3 Review Part 4
Hiring the 2nd worker is considered
Increasing marginal returns
Look at the chart and graph on the back of Topic 3 Review Part 3.
What would happen if the price of cheeseburgers remains $5, but the quantity supplied changes to 600 due to an increase in the number of suppliers for cheeseburgers as a new restaurant opened?
Supply curve shifts right
What is true about when a business will produce at a loss and when a business will shut down right away?
A business will shutdown immediately if the variable costs are higher than the price, but will operate at a loss if selling price is higher than the variable cost.
Demand curve shifts to the right because people buy more of something at the same price because of a change in something other than the price of the item.
increase in demand