Topic 3 (Part 2) Test_English

Match the following vocabulary terms with the definitions below.

• Diminishing marginal returns

• The change in output that results from hiring one additional unit of labor.

• Marginal product of labor

• The level of production in which the marginal product of labor increases as the number of workers increases.

• Increasing marginal returns

• The additional income from selling one more unit of a good or service.

• Negative marginal return

• When the addition of a unit of labor actually reduces total output.

• Marginal Revenue

• The level of production in which the marginal product of labor decreases as the number of workers increases.

Match the following vocabulary terms with the definitions below.

• Average Cost

• The cost of operating a facility, such as a factory or a store.

• Variable costs

• The extra cost of adding one unit.

• Total cost

• The sum of fixed costs and variable costs.

• Marginal cost

• Total cost divided by quantity produced.

• Operating Cost

• A cost that rises or falls depending on the quantity produced.

For a business to find the total cost, what two costs must they add together?

• Marginal Cost

• Variable Cost

• Fixed Cost

• Average Cost

• Operating Cost

If a business shuts down, they would still have to pay for their...

• Fixed costs

• Variable costs

• Average costs

• Marginal costs

Which one of these would NOT be an example of variable costs?

• Rent

• Labor wages

• Packaging

• Raw Materials

• Utilities

Why should producers find out the balance between how much to supply for consumers' demand?

• To try to make as much profit as possible.

• To make sure the customers are happy.

• To make as much product as possible.

• To try to make money to pay taxes.

If a company's total cost is $25,000 and their total revenue is $23,000, the company is...

• making money.

• losing money.

• making the same amount of money.

Match the following vocabulary terms with the definitions below.

• Subsidy

• A tax on the production or sale of a good, which will increase the cost of a good.

• Excise Tax

• The cost to a supplier to produce a good or service.

• Regulation

• A government payment that supports a business or market.

• Suppliers’ Input Cost

• The government telling businesses what they can and cannot do, affecting the production of a good.

How would increasing the input cost for a producer change their supply?

• Suppliers would decrease their supply.

• Suppliers would increase their supply.

• Suppliers would keep their supply the same.

• Suppliers would only change supply if customers ask.

True or False: When there is a decrease in supply level, a supply graph/curve will shift right.

• True

• False