The Difference Between the Sale Value of the Product and the Value

question 86

Multiple Choice

The difference between the sale value of the product and the value of the inputs that went into it is called the:

• A) value-added of that stage of production.
• B) value of the final product.
• C) profit margin.
• D) mark up.

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Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.

Alternative Goods

Products that serve as substitutes for each other; when the price of one increases, the demand for the other may increase.

Equilibrium Position

In the indifference curve model, the combination of two goods at which a consumer maximizes his or her utility (reaches the highest attainable indifference curve), given a limited amount to spend (a budget constraint).

Economic Resources

The land, labor, capital, and entrepreneurial ability that are used to produce goods and services; the factors of production.