are201fall08test2key

are201fall08test2key - ARE 201 Fall 2009, Test 2 Name _KEY_...

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ARE 201 Name _____KEY_____________________________ Fall 2009, Test 2 I. Complete the sentence or provide the short answer on the answer sheet. 1. Business costs unrelated to how much output is produced are called fixed costs. 2. Business costs that change as the amount of output changes are called variable costs. 3. A business will continue to operate, even though it is not making a profit, as long as revenues exceed variable costs. 4. When a firm initially expands output, its average costs decline as production can be done more efficiently at a larger scale. 5. At high levels of output, expanding production even more usually lead to higher average costs for the firm due to the limitations of fixed inputs. 6. For a business, profits = total revenues minus total costs. 7. The concept of “price elasticity of demand” shows how purchasing by consumers of products (or services) changes in response to an increase or decrease in the price of the product (or service). 8.
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This note was uploaded on 10/22/2009 for the course ARE 201 taught by Professor Eryuruk during the Fall '08 term at N.C. State.

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are201fall08test2key - ARE 201 Fall 2009, Test 2 Name _KEY_...

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