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21 Cards in this Set
- Front
- Back
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Law of supply |
Tendency of suppliers to offer more of a good at a higher price |
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Supply schedule |
A chart that lists how mucu of a good a supplier will offer at different prices |
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Market supply schedule |
A chart that lists how much of a good all suppluers will offer at different prices |
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Supply curve |
A graph of the quantity supplied of a good at different prices |
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Market supply curve |
A graph of the quantity supplied of a good by all suppliers at different prices |
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Elasticity of supply |
A measure of the eau quanity supplied reacts to a change in price |
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Elastic |
When elasticity is greater than 1 and supply is very sensitive to change |
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Inelastic |
When elasticity is less than one, supply is not very responsive to price changes |
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Marginal product of labor |
The change in output from hiring one additional unit of labor |
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Increasing marginal returns |
A level of production in which the marginal product of labor increases as the number of workers increases |
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Diminishing marginal returns |
A level of production in which the marginal product of labor decreases as the number of workers increases |
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Fixed cost |
A cost that does not change, no matter how much of a good is provided |
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Variable cost |
A cost that rises or falls depending on how much is produced |
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Total cost |
Fixed costs plus variable costs |
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Marginal cost |
The cost of producing one more unit of a good |
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Marginal revenue |
The additional income from selling one more unit of a good |
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Specialization does what? |
Increases the output and tbe firm enjoys increading marginal returns |
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A firm should stay open so long as: |
The total revenue from the goods is greater than the cost of keeping the factory open. This works because the benefit of keeping open is greater than the variable cost |
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Subsidy |
A government payment that supports a business or market |
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Excise tax |
A tax on the production or sale of a good |
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Why does the suppy curve shift? |
Shifts in prices, rising costs, technology, changes in global economy |
