The Circular-Flow Diagram Explains, in General Terms, How the Economy

question 145

True/False

The circular-flow diagram explains, in general terms, how the economy is organized and how participants in the economy interact with one another.

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Definitions:

Average Total Costs

The total cost of production divided by the quantity of output produced, illustrating the cost per unit of output.

Total Fixed Costs

The total of all expenses that do not change with the amount of production or output.

Marginal Cost Curve

A curve that shows the cost of producing one more unit of a good or service, typically upward sloping because of increasing marginal costs.

Average Variable Cost Curve

A graphical representation of the variable cost per unit at different levels of output.