Lesson 2 Fill-in-the-Blank
High gas prices were an incentive to use plant-based __________, which shifted productive __________ to a new economic sector.
biofuels/resources
Every firm must reach its __________ point, at which it has enough money from sales to cover all its __________.
break-even/operating costs
The imposition of a price __________ may lead to __________ of products as manufacturers reduce production due to lower profits.
ceiling/shortages
A lack of __________ in the economy often leads to lower __________ prices.
confidence/stock
Profit-maximizing quantity of output is the level of production at which marginal __________ is equal to __________.
cost/marginal
Stage 2 illustrates the principle of __________ returns, where output increases at a diminishing rate as more __________ are added.
diminishing/workers
In a product with __________ supply, a change in price leads to a proportionally larger change in quantity supplied.
elastic
Supply is __________ if a company can react to new prices quickly.
elastic
Demand is __________ when the price change results in a relatively larger change in quantity demanded. People __________ need products urgently with this type of demand.
elastic/do not
When a purchase requires more of a person's income, it tends to be __________. However, if the costly purchase is for a product or service a person needs urgently, the demand becomes more __________.
elastic/inelastic
Generally, the more available substitutions are, the more __________ the demand is. The __________ of the market can affect demand elasticity in cases of substitutions.
elastic/size
Too often, it requires __________ conditions before the government implements policies to achieve its economic and __________ goals.
extreme/social
Some of the problems with rationing include perceived __________, the cost of administration, distorted __________, and abuse and misuse.
fairness/incentives
People are __________ with the fact that products have prices, and a reasonable or sale price is often an __________ to consumers to purchase a product.
familiar/incentive
With online selling, the __________ costs are very low, and the v point is also lower than it would be in a real store.
fixed
Rent, salaries, and taxes are just some of the __________ costs faced by businesses that are part of its __________.
fixed/overhead
When businesses raise prices on products with inelastic demand, total revenues are more likely to __________ than when prices are increased on a product with elastic demand.
increase
If resources need to make a product are very __________ or it is difficult to increase production quickly, then the supply is generally __________.
limited/inelastic
The __________ is a production period long enough for the firm to adjust the quantities of all its __________, including capital.
long run/productive resources
The __________ product is the measure of output caused by adding one more unit of variable __________.
marginal/input
The law of Supply states that __________ of a product will be offered at a high price and __________ of a product will be offered at a low price.
more/less
A production function shows how total __________ changes when one __________ of production changes while others stay the same.
output/variable input
A change in quantity supplied only takes place if there is a change in __________.
price
The supply schedule lists the different __________ of a product that is supplied all possible __________ in the market.
quantities/prices
Although some government __________ increase product __________ for consumers, they may also cause an increase in prices.
regulations/safety
The cost of __________ and using more efficient __________ are two factors that affect the supply of a product.
resources/technology
Average __________ is simply the average price of each unit of product sells for.
revenue
In the __________ run, only one variable __________ can be changed to alter supply.
short/input
A __________ paid to a business by the government usually has the effect of lowering cost and increasing __________.
subsidy/supply
When the price of oil increases sharply, that may indicate a lowering of __________ and may indicate __________ ahead for the economy.
supply/trouble
In stage 1 of production, each additional __________ tends to __________ production.
worker/increase
When __________ are motivated and well trained, __________ goes up and supply increases.
workers/productivity
Business, especially sales, conducted electronically over the __________ is known as __________.
Internet/e-commerce
Price ceilings set for rent control are typically __________ and may not be high enough for __________ to make a profit.
arbitrary/landlords
In the U.S. __________ free enterprise economy, the government may set __________ at a particular level to achieve certain social goals.
modified/prices
Price is the __________ value of a product and helps us make economic __________.
monetary/decisions
In times of crisis, the __________ may impose a system of __________ to make sure that everyone gets their fair share of needed products.
government/rationing
Demand is __________ when the price change results in a relatively smaller change in quantity demanded. People __________ need products urgently with this type of demand.
inelastic/do
If you cannot put off purchase of a product, demand is __________. If you can wait, demand is __________.
inelastic/elastic
Because demand for gas is basically __________, when gas prices are __________, people spend a greater portion of their income on gas and have less money to spend elsewhere.
inelastic/high
The costs associated with __________ and materials may change and so are considered __________ costs.
labor/variable
In a __________ economy, prices are __________ and can change as conditions and resources change.
market/flexible
Supply elasticity is a __________ of how much the quantity of a product supplied reacts to a change in __________.
measure/price
What types of elasticity do the following scenarios illustrate? Change in price and change in revenue move in the same direction. __________ Change in price and change in revenue move in opposite directions. __________ Price change has no effect on revenue. __________
Inelastic/Elastic/Unit elastic
__________ revenue is the extra income a business gets from the production and sale of __________ additional unit of output.
Marginal/one
__________ product is often related to the number of __________ added to the production process.
Marginal/workers
The __________ cost a business has when it produces one more unit of output is called __________ cost.
additional/marginal
When government sets a price __________, the product becomes more profitable to produce and a __________ may result.
floor/surplus
The price of __________ tends to go up when the economy is in a __________.
gold/downturn
If you __________ all the units of product sold by the average price of each unit, you get the business's total revenue.
multiply
In Stage 3 of production, adding more workers has a __________ effect on production.
negative
In a perfectly competitive economy, prices are __________ in that they favor neither the producer nor the consumer.
neutral
A __________ load from the government to a necessary producer does not have to be __________.
nonrecourse/repaid
Total expenditures (or total revenue) is found by multiplying the __________ of a product by the __________ for any point along the __________ curve.
price/quantity demanded/demand
The market supply curve is a graph that shows how much of a __________ is offered at various prices by __________ producers who sell that product in a given market.
product/all
When business owners think about __________, they must consider both cost and revenue from __________.
profitability/sales
The __________ price floor is set by the government to stabilize __________ prices.
target/farm
Paying higher __________ sometimes cause a dip in supply because they raise the __________ of production.
taxes/cost
Demand is __________ when the price change results in a proportional change in quantity demanded. This type of demand is __________ to find.
unit elastic/difficult
With __________ elasticity supply, price changes and the amount of the supply are __________.
unit/proportional