question
Diminishing Physical Returns
answer
Marginal outputs decrease with each additional unit of input
question
marginal input cost
answer
Additional cost of adding one more unit of some input.
question
profit
answer
total revenue minus total cost
question
Marginal Revenue Product
answer
the change in total revenue associated with one additional unit of input
question
Variable substitution
answer
- One resource substitutes for part of another at different rates for each additional unit of input
question
Advantages of using substitution
answer
-decrease in input
-increase in output
-save money
-increase in output
-save money
question
rate of return on investment
answer
Net Revenue / Investment
question
rate of return on investment
answer
best way to measure opportunity cost when resources are limited
question
demand curve
answer
a curve that shows the relationship between the price of a product and the quantity of the product demanded
question
Demand Curve Shifters
answer
number of buyers, income, prices of related goods, tastes, expectations
question
supply curve
answer
a graph of the relationship between the price of a good and the quantity supplied
question
supply curve shifters
answer
input prices, technology, number of sellers, expectations
question
Elasticity
answer
a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants
question
Inelastic
answer
Describes demand that is not very sensitive to a change in price
question
price for agricultural commodity is determined by:
answer
Quantity produced and consumed
question
If the supply and demand curves for a product both decrease, then equilibrium:
answer
Shifts to the left for an decrease in price
question
If the supply and demand curves for a product both increase, then equilibrium:
answer
Shifts to the right for an increase in price
question
Utility
answer
the capacity to be useful and provide satisfaction
question
market
answer
a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade
question
supply
answer
The amount of goods available
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demand
answer
Consumer willingness and ability to buy products
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equilibrium price
answer
the price at which the quantity demanded equals the quantity supplied
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surplus
answer
A situation in which quantity supplied is greater than quantity demanded
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shortage
answer
A situation in which quantity demanded is greater than quantity supplied
question
point of maximum return
answer
MIC=MRP
question
fixed costs
answer
Costs that do not vary with the quantity of output produced
question
variable costs
answer
costs that vary with the quantity of output produced
question
Total Costs (TC)
answer
The sum of total fixed and total variable costs at each level of output
question
DIRTI Five
answer
Depreciation
Interest
Repairs
Taxes
Insurance
Interest
Repairs
Taxes
Insurance
question
Variable costs in agriculture
answer
-Labor
-Supplies
-Advertising
-Gasoline
-Utilities
-Supplies
-Advertising
-Gasoline
-Utilities
question
opportunity cost
answer
the most desirable alternative given up as the result of a decision
question
limited resources
answer
the condition of there not being enough resources to fulfill all wants and needs
-Land
-Labor
-Capital
-Land
-Labor
-Capital
question
Six functions of time value of money
answer
Future Value of a Dollar
Future Value of a Dollar per Period
Sinking Funds
Present Value of a Dollar
Present Value of a Dollar per Period
Amortization
Future Value of a Dollar per Period
Sinking Funds
Present Value of a Dollar
Present Value of a Dollar per Period
Amortization
question
Amortization
answer
the reduction of a loan balance through payments made over a period of time
question
future value of a dollar
answer
amount to which a single payment will grow at some rate of interest
question
Present Value of a Dollar
answer
current value of a dollar to be received in the future
question
sinking fund
answer
Saving money over time for a large purchase
question
necessity
answer
anything that cannot be done without or that is greatly needed
question
luxury
answer
A comfort or enjoyment that is not necessary or essential
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