Chapter 5 Flashcards
Supply
the amount of a product that would be offered for sale at all possible prices that could prevail in the market
Law of Supply
Quantity supplied varies directly with price
Supply Schedule
a listing of the various quantities of a particular product supplied at all possible prices in the market
Supply Curve
a graph showing the various quantities supplied at each and every price that might prevail in the market
Market Supply Curve
the supply curve that shows the quantities offered at various prices by all firms that offer the product for sale in a given market
Quantity Supplied
the amount that producers bring to market at any given price
Change in Quantity Supplied
the change in amount offered for sale in response to a change in price
Subsidy
a gov’t payment to an individual, business, or other group to encourage or protect a certain type of economic activity
Supply Elasticity
a measure of the way in which the quantity supplied responds to a change in price
Theory of Production
the relationship between the factors of production and the output of goods and services
short run
a period of production that allows producers to change only the amount of the variable input called labor
long run
a period of production long enough for producers to adjust the quantities of all their resources, including capital
total product
total output produced by the firm
marginal product
extra output due to the addition of one more unit of input
3 Stages of Production
- increasing returns
- diminishing returns
- negative returns
