Chapter 4: Supply Flashcards
law of supply
a principle in economics that states that as a price of a good, service, resource rises, the quantity supplied will increase and vice versa (all else held constant); direct relationship between price and quantity supplied
diminishing marginal productivity
the principle that if at least one input of production is fixed, the marginal productivity of additional variable resources will eventually fall (all else held constant)
supply schedule
a tabular representation of the relationship between the price of a good, service, resource and the quantities producers are willing and able to supply over fixed time period (all else held constant)
supply curve
a graphical representation of the relationship between the price of a good, service, resource and the quantities producers are willing and able to supply over fixed time period (all else held constant)
market supply
the overall supply of a good, service, resource
change (shift) in supply
a change in the quantity of a good, service, resource supplied at every price
movement along a supply curve
a change in the quantity of a good, service, resource supplied due to a change in its price
subsidy
a payment made by the government that does not necessarily require an exchange of economic activity in return
tax
a payment made to government that is the result of economic activity
resources
inputs used to produce goods and services; factors of production
technology
knowledge, inventions, and innovations that can potentially increase resource productivity
sellers
market participants who are willing and able to sell goods, services, resources
seller expectations
anticipated future outcomes, including prices, that sellers associate with the production of a good, service, resource
production
quantity of output firms produce
supply
quantity of output firms are willing and able to provide to the market at different prices (all else held constant)
