WGU C718 vocabulary Test Questions with Answers 2024/2025

WGU C718 vocabulary Test Questions with Answers 2024/2025 absolute advantage - ️️ -when a country (or person) can produce more of a good than another country (In this picture England has absolute advantage in both goods) accounting profit - ️️ -profit computed using only explicit costs (Acct Profit = Total Revenue - Explicit Costs) marginal external costs - ️️ -additional costs incurred by third parties outside the production process when a unit of output is produced adverse selection - ️️ -when the buyer of a product has more information than the seller of the product in a transaction allocative efficiency - ️️ -when society is providing the right mix of goods and services to the population asymmetric information - ️️ -a situation where the seller or the buyer has more information than the other regarding the quality of the item being sold average fixed cost (afc) - ️️ -total fixed cost divided by quantity - always decreases as output increases (because top of the fraction stays the same while bottom of the fraction increases) average product - ️️ -the output per unit of input average product of labor - ️️ -the number of units of output each unit of labor produces on average (Q/L) average revenue - ️️ -total revenue divided by quantity (always equal to price!) average total cost (atc) - ️️ -total cost divided by quantity; it is the firm's total cost per unit of output average variable costs (avc) - ️️ -total variable cost divided by quantity; it is the firm's total variable cost per unit of output barriers to entry - ️️ -something that blocks the entry of new firms in a monopoly or oligopoly market budget constraint - ️️ -we can't spend more than our budget budget line - ️️ -graphically shows the combination of two goods a consumer can buy with a given budget - the number on each axis shows the maximum amount a consumer can buy if they only buy that good and none of the other good capital - ️️ -a factor of production that is made to produce other things (tools, equipment, etc.) cartel - ️️ -a group of firms that overtly collude to act like a monopoly (reduce output and drive up prices) ceteris paribus - ️️ -holding everything else constant and changing only one thing to see the effect change in demand - ️️ -a shift in a demand curve (the demand curve moves either to the right or to the left) Never caused by a change in price! change in quantity demanded - ️️ -a movement along the demand curve caused by a change in price change in quantity supplied - ️️ -a movement along the supply curve caused by a change in price change in supply - ️️ -a shift in th