Test 6 - Goods and Products Flashcards
What is the ability of an entity to produce a good at an opportunity cost that is lower than that of another producer?
comparative advantage
What is the total amount invested in the production of a good?
input
What usually results when a government fixes a good’s price above its equilibrium price?
surplus
What is the relationship between a good’s price and the amount that people are willing to buy?
demand
What type of good is an oven used to bake bread in a bakery?
capital good
What is the value of all finished goods and services produced within a country during a year’s time?
GDP
What function of money allows people to compare the worth of one good with that of another good?
measure of value
What is a system for the production, distribution, and consumption of goods?
economy
What principle states that as one’s supply of a good increases, the satisfaction derived from each additional unit tends to decrease?
Principle of diminishing marginal utility
When the price of a good falls, what happens to the quantity supplied?
it tends to decrease
If the price of a certain type of cereal doubled and caused consumers to cut in half the amount of that cereal they bought, would the demand for that good be inelastic or elastic?
elastic
When the supply of a good increases, what tends to decrease?
equilibrium price
What is the sum cost of all the factors of production used in making goods?
total cost
What determines the value of a good by a consumer?
Utility and Scarcity
What factors compose the “American System” of mass production?
Division of Labor
Automatic Conveyance
Standardized Parts
