1141 Definitions

Question 1

economic institution that produces or sells goods

Answer 1

firm

Question 2

most commonly varied factor in the short run

Answer 2

labor

Question 3

involves entrepreneurship and administration

Answer 3

management

Question 4

materials provided by God

Answer 4

natural resources

Question 5

man-made instruments of production

Answer 5

capital

Question 6

basis of decisions in the production factor market

Answer 6

productivity

Question 7

basis of consumer decisions

Answer 7

utility

Question 8

most typical exchange in a complex society

Answer 8

money

Question 9

exchanging one good or service for another

Answer 9

barter

Question 10

negative profit

Answer 10

loss

Question 11

formula for determining profit

Answer 11

total revenue - total cost

Question 12

average fixed cost

Answer 12

FC/Q

Question 13

average variable cost

Answer 13

VC/Q

Question 14

product or service

Answer 14

output of production

Question 15

law of diminishing marginal returns

Answer 15

“flowerpot” law

Question 16

four basic factors of production

Answer 16

inputs of production

Question 17

costs based on alternative uses of production factors

Answer 17

opportunity costs

Question 18

costs that increase as the firm increases production

Answer 18

variable costs

Question 19

costs that do not change in the short run or when output changes

Answer 19

fixed costs

Question 20

cost of increasing output by one unit

Answer 20

marginal cost

Question 21

obtaining a given output at the lowest possible cost

Answer 21

economic efficiency

Question 22

obtaining a given output with as few inputs as possible

Answer 22

technical efficiency

Question 23

costs of producing one unit of a good

Answer 23

unit production costs

Question 24

a result of a firm exceeding its optimum size

Answer 24

diseconomies of scale

Question 25

costs that remain the same even when output rises

Answer 25

constant costs

Question 26

physical characteristics of the market within which firms interact

Answer 26

market structure

Question 27

amount each additional unit of output adds to total cost

Answer 27

marginal cost

Question 28

amount each additional unit of output adds to total revenue

Answer 28

marginal structure

Question 29

most profitable point for any firm

Answer 29

MC = MR = P

Question 30

The practice of charging different prices to different individuals

Answer 30

Price discrimination

Question 31

When the 4 largest firms of an industry account for at least 50% of its output

Answer 31

the industry is an oligopoly

Question 32

Prices that do not change frequently

Answer 32

sticky prices