RECITATION_MIDTERM

Question 1

What is the term for any economic activity that combines factors of production?

Answer 1

Production

Question 2

What are the four factors of production?

Answer 2

Land, Labor, Capital, Entrepreneurship

Question 3

What type of input can be changed in response to output changes?

Answer 3

Variable Input

Question 4

What do we call the period when at least one factor of production is fixed?

Answer 4

Short Run

Question 5

Which type of goods are necessary for daily living?

Answer 5

Essential or Necessity Goods

Question 6

What is the average amount of output per unit of input called?

Answer 6

Average Product

Question 7

What happens to total output when additional units of labor are added?

Answer 7

It increases but at a decreasing rate

Question 8

What is the name of the curve that shows all combinations of factors producing a certain output?

Answer 8

Isoquant

Question 9

Which type of goods are considered luxury items?

Answer 9

Luxury Goods

Question 10

What term describes the additional cost of producing one more unit of a product?

Answer 10

Marginal Cost

Question 11

What is the relationship between total product and variable inputs?

Answer 11

Total product increases with more variable inputs

Question 12

What is consumer surplus?

Answer 12

The difference between what consumers are willing to pay and what they actually pay

Question 13

Which goods have a price that is often zero due to their abundance?

Answer 13

Free Goods

Question 14

What is the relationship between fixed costs and output?

Answer 14

Fixed costs do not vary with output

Question 15

What does Maslow’s Hierarchy of Needs start with?

Answer 15

Physiological needs

Question 16

What is the theory that suggests consumers will choose products to maximize satisfaction?

Answer 16

Consumer Choice

Question 17

What do we call the extra output produced by one additional unit of input?

Answer 17

Marginal Product

Question 18

What type of costs change as output changes?

Answer 18

Variable Costs

Question 19

What does the term ‘diminishing returns’ mean?

Answer 19

Additional input results in smaller increases in output

Question 20

What is the difference between total cost and fixed cost?

Answer 20

Total Cost = Fixed Cost + Variable Cost

Question 21

What are services in economics?

Answer 21

Intangible economic activities

Question 22

What type of costs remain constant regardless of production levels?

Answer 22

Fixed Costs

Question 23

What do we call the satisfaction gained from consuming goods and services?

Answer 23

Utility

Question 24

How can firms increase output in the short run?

Answer 24

By adding more variable inputs

Question 25

What is the average total cost (ATC) formula?

Answer 25

ATC = Total Cost / Quantity

Question 26

What type of costs are expenses that do not change as production levels change?

Answer 26

Fixed Costs

Question 27

What is an example of a variable cost?

Answer 27

Labor or raw materials

Question 28

What happens to average total cost as production increases, assuming constant fixed costs?

Answer 28

It generally decreases

Question 29

What is the formula for total cost?

Answer 29

Total Cost = Fixed Cost + Variable Cost

Question 30

What happens to marginal cost as production increases, typically?

Answer 30

It may increase due to diminishing returns

Question 31

What does an increase in demand typically do to prices?

Answer 31

It raises prices

Question 32

What is the purpose of isoquants in production theory?

Answer 32

To show combinations of inputs for a given output

Question 33

What are public goods?

Answer 33

Goods that are non-excludable and non-rivalrous

Question 34

What is an example of a fixed input in production?

Answer 34

Machinery or factory space

Question 35

How do firms determine the optimal level of production?

Answer 35

By analyzing cost and revenue

Question 36

What is the economic concept of scarcity?

Answer 36

Limited resources vs. unlimited wants

Question 37

How does consumer behavior influence market prices?

Answer 37

Higher demand leads to higher prices

Question 38

What does it mean if a product is inelastic?

Answer 38

Demand does not change much with price changes

Question 39

What is the significance of elasticity in pricing?

Answer 39

It helps determine how much prices can be raised

Question 40

How do subsidies affect supply?

Answer 40

They increase supply by reducing production costs

Question 41

What is the relationship between total product and marginal product in the increasing phase?

Answer 41

Marginal product is increasing

Question 42

How can technology impact production?

Answer 42

It can improve efficiency and reduce costs

Question 43

What is the role of entrepreneurs in the economy?

Answer 43

They combine resources to create goods/services

Question 44

What is a good definition of a market?

Answer 44

A place where buyers and sellers interact

Question 45

What do you call the change in total revenue when one more unit is sold?

Answer 45

Marginal Revenue

Question 46

What is the definition of labor productivity?

Answer 46

Output per labor hour

Question 47

What is the principle of comparative advantage?

Answer 47

Specialization leads to increased efficiency

Question 48

How do changes in consumer preferences affect market supply?

Answer 48

They can shift supply curves

Question 49

What is meant by the term 'monopoly'?

Answer 49

A market structure with a single seller

Question 50

What are the characteristics of a perfectly competitive market?

Answer 50

Many buyers and sellers, identical products