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Question 1

What is marginal cost

Answer 1

increase in production costs generated by production of additional unit

Question 2

What is economies of scope

Answer 2

production of one good reduces cost of producing another related good

Question 3

What are diseconomies of scale

Answer 3

occur when a business grows so large that costs per unit increase

Question 4

What are diminishing returns

Answer 4

as investment in a particular area increases, rate of profit from that investment after a certain point cannot continue to increase if other variables remain at a constant

Question 5

What is equalibrium

Answer 5

economic forces such as supply and demand are balanced

Question 6

What are positive externalities

Answer 6

production and consumption of a good or service benefits a third party not directly involved in market transaction

Question 7

What are negative externalities

Answer 7

production or consumption of a product results in a cost to a third party

Question 8

What is a subsidy

Answer 8

benefit given to an individual, business, or institution, usually by the government

Question 9

What is breakeven price

Answer 9

amount of money, or change in value, for which an asset must be sold to cover the costs of acquiring and owning it

Question 10

What are public goods

Answer 10

nonexcludable and nonrivalrous