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# Solutions for Chapter Module 54: The Production Function

## Full solutions for Krugman's Economics for AP® (High School) | 2nd Edition

ISBN: 9781464122187

Solutions for Chapter Module 54: The Production Function

Solutions for Chapter Module 54
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##### ISBN: 9781464122187

Chapter Module 54: The Production Function includes 5 full step-by-step solutions. Krugman's Economics for AP® (High School) was written by and is associated to the ISBN: 9781464122187. Since 5 problems in chapter Module 54: The Production Function have been answered, more than 3390 students have viewed full step-by-step solutions from this chapter. This expansive textbook survival guide covers the following chapters and their solutions. This textbook survival guide was created for the textbook: Krugman's Economics for AP® (High School), edition: 2.

Key Business Terms and definitions covered in this textbook
• budget constraint

the limit on the consumption bundles that a consumer can afford

the ability to produce a good at a lower opportunity cost than another producer

• cost

the value of everything a seller must give up to produce a good

• depreciation

a decrease in the value of a currency as measured by the amount of foreign currency it can buy

• diminishing marginal product

the property whereby the marginal product of an input declines as the quantity of the input increases

• equilibrium price

the price that balances quantity supplied and quantity demanded

• inflation

an increase in the overall level of prices in the economy

• inflation

an increase in the overall level of prices in the economy

• marginal product of labor

the increase in the amount of output from an additional unit of labor

• median voter theorem

a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter

• monopoly

a firm that is the sole seller of a product without close substitutes

• perfect complements

two goods with right-angle indifference curves

• price floor

a legal minimum on the price at which a good can be sold

• production possibilities frontier

a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology

• profit

total revenue minus total cost

• proportional tax

a tax for which highincome and low-income taxpayers pay the same fraction of income

• quantity demanded

the amount of a good that buyers are willing and able to purchase

• rivalry in consumption

the property of a good whereby one person’s use diminishes other people’s use

• shortage

a situation in which quantity demanded is greater than quantity supplied

• surplus

a situation in which quantity supplied is greater than quantity demanded

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