Ch 5 Flashcards
law of supply
producers offer more of a good as its price increases and less as its price falls
the amount of goods available
supply
the amount that a supplier is willing and able to supply at a specific price
quantity supplied
a chart that lists how much of a good a supplier will offer at various prices
supply schedule
a factor that can change
variable
a chart that lists how much of a good all suppliers will offer at various prices
market supply schedule
a graph of the quantity supplied of a good at various prices
supply curve
a graph of the quantity supplied of a good by all suppliers at various prices
market supply curve
a measure of the way quantity supplied reacts to a change in price
elasticity of supply
the change in output from hiring one additional unit of labor
marginal product of labor
a level of production in which the marginal product of labor increases as the number of workers increases
increasing marginal returns
a level of production at which the marginal product of labor decreases as the number of workers increases
diminishing marginal returns
fixed cost
a cost that does not change, no matter how much of a good is produced
variable cost
a cost that rises or falls depending on the quantity produced
the sum of fixed costs plus variable costs
total cost
marginal cost
the cost of producing one more unit of a good
the additional income from selling one more unit of a good; sometimes equal to price
marginal revenue
average cost
the total cost divided by the quantity produced
the cost of operating a facility, such as a factory or a store
operating cost
a government payment that supports a business or market
subsidy
a tax on the production or sale of a good
excise tax
government intervention in a market that affects the production of a good
regulation
revenue
also called gross income, this is the total amount of money a company receives
profit
also called net income, this is the total amount of money a company receives less expenses.
is elasticity usually greater in the short run or the long run? explain.
greater in the long run because you have a longer time to adjust
