chap 5

Question 1

supply

Answer 1

is the desire and ability to produce and sell a product.

Question 2

law of supply

Answer 2

states that when prices decrease, quantity supplied decreases, and when prices increase, quantity supplied increases.

Question 3

supply schedule

Answer 3

lists how much of a good or service an individual producer is willing and able to offer for sale at each price.

Question 4

market supply schedule

Answer 4

lists how much of a good or service all producers in a market are willing and able to offer for sale at each price.

Question 5

supply curve

Answer 5

shows the data from a supply schedule in graph form

Question 6

market supply curve

Answer 6

hows the data from a market supply schedule in graph form.

Question 7

marginal product

Answer 7

is the change in total output brought about by adding one more worker.

Question 8

specialization

Answer 8

is having a worker focus on a particular aspect of production.

Question 9

increasing returns

Answer 9

occur when hiring new workers causes marginal product to increase.

Question 10

diminishing returns

Answer 10

occur when hiring new workers causes marginal product to decrease.

Question 11

fixed cost

Answer 11

are those that business owners incur no matter how much they produce.

Question 12

variable cost

Answer 12

depend on the level of production output.

Question 13

total cost

Answer 13

is the sum of fixed and variable costs.

Question 14

marginal cost

Answer 14

is the extra cost of producing one more unit.

Question 15

marginal revenue

Answer 15

is the money made from the sale of each additional unit of output.

Question 16

total revenue

Answer 16

is a company’s income from selling its products.

Question 17

profit-maximizing output

Answer 17

is the level of production at which a business realizes the greatest amount of profit.

Question 18

change in quantity supplied

Answer 18

is a rise or fall in the amount producers offer for sale because of a change in price

Question 19

change in supply

Answer 19

occurs when a change in the marketplace prompts producers to sell different amounts at every price.

Question 20

input costs

Answer 20

are the price of the resources used to make products.

Question 21

labor productivity

Answer 21

is the amount of goods and services that a person can produce in a given time.

Question 22

technology

Answer 22

entails applying scientific methods and innovations to production.

Question 23

excise tax

Answer 23

is a tax on the making or selling of certain goods or services

Question 24

regulation

Answer 24

is a set of rules or laws designed to control business behavior.

Question 25

elasticity of supply

Answer 25

is a measure of how responsive producers are to price changes in the marketplace.