The Trade of Things of Value Between a Buyer and a Seller

question 58

Multiple Choice

The trade of things of value between a buyer and a seller so that each is better off as a result is referred to as a(n) :

• A)demand.
• B)want.
• C)exchange.
• D)necessity.
• E)need.

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Definitions:

Marginal Cost

The additional cost incurred when producing one more unit of a good or service.

Economic Profit

The total revenue of a firm minus its explicit and implicit costs, representing the surplus generated beyond the opportunity cost.

Marginal Revenue

The increase in earnings from the sale of one additional unit of a good or service.

Competitive Price-Taker

An enterprise that is unable to dictate the market price and thus must conform to the current market price for its offerings.