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### 19 Cards in this Set

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