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19 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is Supply?
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The amount of goods available.
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Quantity of goods
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What is the Law of Supply?
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Tendency of suppliers to offer more of a good at a higher price.
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The higher the price, the larger the quantity produced.
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What is Quantity Supplied?
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The amount a supplier is willing and able to supply at a certain price.
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Determined by a firm's search for profits by making more goods or raising prices
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What is a Supply Schedule?
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A chart that lists how much of a good a supplier will offer at different prices.
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Shows the relationship between the price & quantity supplied for a specific good.
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What is a Variable?
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A factor that can change.
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Ex. price of pizza & the number of slices sold
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What is a Market Supply Schedule?
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A chart that lists how much of a good all suppliers will offer at different prices.
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Shows the relationship between prices and the total quantity supplied by all firms in a particular market.
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What is a Supply Curve?
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A graph of the quantity supplied of a good a different prices.
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The horizontal axis now measures the quantity of good supplied, not the quantity demanded.
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What is a Market Supply Curve?
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A graph of the quantity supplied of a good by all suppliers at a different prices.
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Illustrates how higher prices leads to higher output. Rises from left to right.
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What is "Elasticity of Supply"?
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A measure of the way quantity supplied reacts to a change in price.
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Tells how firms will respond to changes in the price of a good. ( elastic, inelastic, and unitary elastic)
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What is the "Marginal Product of Labor"?
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The change in output from hiring one additional unit of labor.
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Measures change in output at the margin, where the last worker has been hired /fired.
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What are Increasing Marginal Returns?
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A level of production in which the marginal product of labor increased as the number of workers increases
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work production increases with specialization & additional workers
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What are Diminishing Marginal Returns?
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A level of production in which the marginal product of labor decreases as the number of workers increases
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workers must work with a limited amount of capital
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What is a Fixed Cost?
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A cost that does not change, no matter how much of a good is produced.
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Ex. rent, machinery, repairs, property taxes on a factory & worker salaries
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What is Variable Cost?
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A cost that rises or falls depending on how much is produced.
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Include raw materials and some labor.
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What is Total Cost?
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Fixed Costs plus Variable Costs.
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Ex. are costs of buildings plus machinery & equipment inside.
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What is Marginal Cost?
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The cost of producing one more unit of a good.
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This cost to the supplier falls as production rises until you reach the point of "diminishing returns"
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What is a Subsidy?
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A government payment that supports a business or market.
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Governments do this to help producers in time of need (war/famine), to protect a cultural way of life, to prevent overplanting crops & protect young businesses/industry from strong foreign competition.
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What is an Excise Ta?
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A tax on the production or sale of a good.
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Increases production costs by adding an extra cost for each unit sold. Ex. Vice Goods like tobacco, liquor, alcohol, or high pollutant gasoline.
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What is a Regulation?
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Government intervention in a market that affects the production of a good.
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Ex. In 1970 the Government required auto makers to install technology to reduce pollution from cars & required new cars use lead free gasoline to protect our environment.
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