Entrepreneurship Chapter 3

The government imposes taxes on certain goods and services, reducing producers' revenues.

Fixed costs must be paid even if a company has no sales.

When a company controls all of the market, it has a monopoly.

A subsidy is a payment to the government by the producers of certain kinds of goods & services.

Scarcity is when people's wants are unlimited & resources are limited.

The cost of social programs is small because the cost is spread among millions of taxpayers.

In a market economy, products are always available to everyone who has money to pay for them.

The supply curve shows that as the price of a good rises, supplies will produce more.

When the quantity of a good or service produced increases, variable costs remain the same.

Because everyone benefits from a public good, the government plays a role in providing the good

If the marginal cost of a change is less than the marginal benefit of the change,

In a market economy, decisions about production of goods and services are made by the govern..

The government requires companies to hire regulators to make sure their products are safe.

In a market economy, all sectors of the economy are competitive.

Certain entrepreneurs, such as barbers, must pass exams and pay fees before they can start.

The USDA inspects meat and poultry plants to ensure that conditions are safe for workers.

The government affects the US economy by purchasing huge amounts of goods & services. 

Opportunity cost measures the disadvantages of choosing one investment over another.

Scarcity occurs in a command economy but not in a market economy

The price at which the supply & demand curves for a good intersect is the equivalent price.

A business with many variable costs is a higher risk than a business with mostly fixed costs.

Marginal cost is the difference between fixed costs and variable costs.

The demand curve shows that as the price of a good rises, individuals will buy/use more.

Marginal benefit measures the advantages of producing one additional unit of a good or service.

The forces of supply and demand work together to determine price in a market economy.

A company should price its product based only on the materials involved in producing it.

Entrepreneurs make business decisions based on the concepts of marginal cost & marginal benefit

Be imposing lower taxes on people with high incomes the government can redistribute income.