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Econ > chapter 5 > Flashcards

chapter 5 Flashcards

1
Q

principle that more will be offered for sale at higher prices than at lower prices.

A

Law of supply

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1
Q

amount of a product a producer or seller would be willing to offer for sale at all possible
prices in a market at a given point in time.

A

Supply

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2
Q

a table showing the quantities that would be produced or offered for sale at
each and every possible price in the market at a given point in time.

A

Supply schedule

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3
Q

a graph that shows the quantities supplied at each and every possible price in the
market.

A

Supply curve

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4
Q

specific amount offered for sale at a given price; point on the supply curve.

A

Quantity Supplied

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5
Q

different amongst offered for sale at each and every possible price in the
market; shift of the supply curve.

A

Change in supply

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6
Q

responsiveness of quantity supplied to a change in price.

A

Supply Elasticity

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7
Q

graphic portrayal showing how a change in the amount of a single variable
input affects total output.

A

Production Function

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8
Q

production period so short that only variable inputs (usually labor) can be changed.

A

Short run

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9
Q

production period long enough to change the amount of variable and fixed inputs used
in production.

A

Long run

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10
Q

total output or production by a firm.

A

Total product

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11
Q

extra output due to the addition of one more unit of input.

A

Marginal Product

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12
Q

phases of production that consist of increasing, decreasing, and negative
returns.

A

Stages of production

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13
Q

stage of production where output increases at a decreasing rate as more
units of variable input are added.

A

Diminishing Returns

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14
Q

costs of production that do not change when output changes.

A

Fixed costs

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15
Q

broad category of fixed costs that includes interest, rent, taxes, and executive salaries.

A

Overhead

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16
Q

production cost that varies as output changes; labor, energy, raw materials.

A

Variable cost

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17
Q

extra cost of producing one additional unit of production.

A

Marginal cost

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18
Q

level of production where marginal cost is equal to
marginal revenue.

A

Profit-Maximizing Quantity of Output

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19
Q

production level where total cost equals total revenue; production needed if the
firm is to recover its costs.

A

Break-Even Point

20
Q

Combination of quantities that someone
would be willing and able to buy over a
range of possible prices at a given
moment.

A

Demand

21
Q

Branch of economic theory that deals
with behavior and decision making by
small units such as individuals and firms.

A

MICROECONOMICS

22
Q

Graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time

A

Demand curve

23
Q

Rule stating that more will be demanded at lower prices and less at higher prices, an inverse relationship between price and quantity demanded

A

Law of Demand

24
Q

Additional satisfaction or usefulness
obtained from acquiring or consuming
one more unit of a product.

A

Marginal Utility

25
Q

Decrease in additional satisfaction or
usefulness as additional units of a
product are acquired.

A

DIMINISHING MARGINAL UTILITY

26
Q

movement along the demand curve
showing that a different quantity is
purchased in response to a change
in price.

A

Change in Quantity Demanded

27
Q

That portion of a change in quantity
demanded caused by a change in a
consumers income when the price of a
product changes.

A

Income effect

28
Q

The portion of a change in quantity
demanded that is due to a change in the
relative price of the good.

A

SUBSTITUTION EFFECT

29
Q

different amounts of a product
are demanded at every price,
causing the demand curve to
shift to the left or to the right.

A

Change in Demand

30
Q

Competing products that can be used in
place of one another; products related in
such a way that an increase in the price
of one increases the demand for the
other.

A

SUBSTITUTES

31
Q

Products that increase the use of other
products; products related in such a way
that an increase in the price of one
reduces the demand for both.

A

Compliments

32
Q

A measure of responsiveness that tells us
how a dependent variable, such as
quantity demanded or quantity supplied,
responds to a change in an independent
variable such as price.

A

Elasticity

33
Q

The extent to which a change in price
causes a change in the quantity
demanded; demand elasticity has three
cases; elastic, inelastic, or unit elastic.

A

DEMAND ELASTICITY

34
Q

Type of elasticity in which a change in the
independent variable (usually price) results in a
larger change in the dependent variable
(usually quantity demanded or supplied).

A

Elastic

35
Q

Case of demand elasticity where the
percentage change in the independent variable
(usually price) causes a less than proportionate
change in the dependent variable (usually
quantity demanded or supplied).

A

Inelastic

36
Q

elasticity where a
change in the independent variable
(usually price) generates a
proportional change of the
dependent variable (quantity
demanded or supplied).

A

Unit Elastic

37
Q

As price increase,
As price decreases

A

demand decreases
demand increases

38
Q

A product’s ___ motivates a
consumer to demand
more of the product.

A

marginal
utility

39
Q

Substitute examples

A

Sweats and leggings
Milk and almond milk
butter and margarine

40
Q

Complements

A

Cell phone and charger
Burgers and buns
Socks and shoes

41
Q

Inelastic demand example

A

Medicine

42
Q

Determinants of Elasticity

A

Can purchase be delayed?
Are adequate substitutes available?
Does purchase use a large portion of income?

43
Q

The supply curve slopes in the ___ direction of the
demand curve.

A

opposite

44
Q

A change in quantity
supplied is caused by a
change in the

A

price of a product

45
Q

When the cost of resources decreases,
When the cost of resources increases,

A

supply increases
Supply decreases

46
Q

The use of the production
function is important to
business because it allows
businesses to gauge whether

A

additional input will result in
extra output.

47
Q

Stages of production

A

Increasing Marginal Returns
Decreasing Marginal Returns
Negative Marginal Returns

48
Q

Costs that affect a business’s production decisions

A

fixed cost
variable cost
total cost
marginal cost

Econ (7 decks)

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