Chapter 5- Section 3 Flashcards Preview

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Flashcards in Chapter 5- Section 3 Deck (13):
0

The cost that a business incurs even at the plant is idle and output is zero

Fixed cost

1

Overhead is what?

Total fixed cost

2

What do fixed costs include?

Salaries paid to executives, interest charges on bonds, rent payments on lease properties, and local and state property taxes they also include deprecation, the gradual wear and tear on capital goods over time and through use

3

A cost that changes when the business rate of operation are output changes

Variable costs

4

Variable costs are generally associated with what?

Labor and raw materials

5

Sum of the fixed and variable costs

Total cost

6

The extra cost incurred when a business produces one additional unit of a product

Marginal cost

7

Electronic business or exchange conducted over the Internet

E-commerce

8

Number of units sold multiplied by the average price per unit

Total revenue

9

The extra revenue associated with the production and sale of one additional unit of output

Marginal revenue

10

A type of cost-benefit decision making that compares the extra benefits to the extra cost of an action

Marginal analysis

11

The total output or total product business needs to sell in order to cover its total costs

Break-even point

12

Reached when marginal cost and marginal revenue are equal

Profit maximizing quantity of output