WGU C718 vocabulary | Questions and Correct Solutions 2024

WGU C718 vocabulary | Questions and Correct Solutions 2024 absolute advantage - Answer -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 - Answer -profit computed using only explicit costs (Acct Profit = Total Revenue - Explicit Costs) marginal external costs - Answer -additional costs incurred by third parties outside the production process when a unit of output is produced adverse selection - Answer -when the buyer of a product has more information than the seller of the product in a transaction allocative efficiency - Answer -when society is providing the right mix of goods and services to the population asymmetric information - Answer -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) - Answer -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 - Answer -the output per unit of input average product of labor - Answer -the number of units of output each unit of labor produces on average (Q/L) average revenue - Answer -total revenue divided by quantity (always equal to price!) average total cost (atc) - Answer -total cost divided by quantity; it is the firm's total cost per unit of output average variable costs (avc) - Answer -total variable cost divided by quantity; it is the firm's total variable cost per unit of output