Shari is creating a process flow diagram of her company's integrated business processes, after which of the following activities should she include a decision point?

shift factors

income, climate, trends, prices of related goods, population, etc.

what makes a person a buyer?

wants, needs, and desires

average variable cost

variable cost / quantity

production possibilities curve

Outside: not attainable output Inside: inefficient, resources not fully utilized on curve: efficient output combinations * The curve measures the trade-off between producing one good versus another

quantity supply vs supply

Quantity supply:the amount of the good businesses provide at a specific price supply: supply in general (the entire curve)

market equilibrium

a market state where the supply in the market is equal to the demand in the market.

price elasticity

a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price.

increasing opportunity cost

as you increase doing one opportunity, the cost of the other opportunity increases.

actual product

change in total product /

marginal cost

change of total cost / change of quantity

marginal product

change of total product / change of quantity

total cost

fixed cost + variable cost

Cross Elasticity

measures the responsiveness of the quantity demanded for a good to a change in the price of another good (negative for complementary goods)

movement vs shift

movement: change along the curve shift: when the whole line moves, quantity demanded, or supply changes while price stays same.

quantity demanded vs demand

quantity demanded: point on the demand curve, corresponds to a specific price. demand: demand in general (demand schedule or demand curve).

constant opportunity cost

resources are equally suited for both opportunities

income elasticity

the degree to which individuals, consumers or producers change their demand or the amount supplied in response to price or income changes.

producer surplus

the difference between the amount the producer is willing to supply goods for and the actual amount received by him when he makes the trade.

consumer surplus

the difference between the price that consumers pay and the price that they are willing to pay

equilibrium price

the price of a good or service when the supply of it is equal to the demand for it in the market

law of demand

the quantity of a good demanded falls as the price rises, and vice versa

law of supply

the quantity of a good supplied rises as the market price rises, and falls as the price falls.