Use the Figure Below to Answer the Following Questions

question 93

Multiple Choice

Use the figure below to answer the following questions. Figure 3.4.2
-At a price of $4 a unit in Figure 3.4.2,

• A)the equilibrium quantity is 400 units.
• B)there is a surplus of 200 units.
• C)the quantity supplied is 400 units.
• D)there is a shortage of 200 units.
• E)the quantity demanded is 200 units.

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Definitions:

Diminishing Marginal Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.

Variable Factor

An input or resource whose quantity can be changed in the short run to adjust production levels.

Total Output

The total quantity of goods or services produced by an economy or firm in a given period.

Total Product Curve

A graph that illustrates the total quantity of output produced by a firm as a function of the total quantity of a single input used, holding all other inputs constant.