Business Concepts Quiz

What is a basic question any business owner has to answer?

• What to make?

• How much to sell the product for?

• How many workers to hire?

• How much money can I make.

Define Marginal Product of Labor

• the change in output from hiring 1 additional unit of labor

• the sum of fixed costs plus variable costs

Increasing Marginal Returns

• The level of production increases as the number of workers increases

• The change in output after hiring 1 more unit of labor

• The level of production decreases as the number of workers increases

• The level of production decreases as the number of workers decreases

Diminishing Marginal Returns

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

• marginal product of labor decreases with the number of workers increases

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

• When the marginal product of labor increases with the number of workers

Human-made resources that is used to produce other goods & services.

• Capital

• Production

• Scarcity

• Miley Cyrus

When the 8th worker is hired, the marginal product of labor becomes negative. Why?

• workers are making more shoes than demand

• the need for a greater supply of shoes has decreased

• there are fewer workers available to make shoes

• there are more workers than are needed, disrupting output.

Fixed costs...

• are costs that change all the time

• are costs that don't change depending on output

• are different all the time

• are the money a business receives

Variable costs

• Costs that change

• Costs that do not change with level of output

• Costs that change with level of output

• The difference between cost of goods and selling price

Total Costs =

• Profit or Loss

• Revenue plus fixed Costs

• Fixed Costs + Variable Costs

• The loss made from not selling enough

What is marginal costs?

• expenses that change with the number of items produced

• additional cost of producing one additional unit of output

• expenses that are same no matter how many units