Chapter 5 Study Guide Flashcards
A _____ is a graph that shows the various quantities supplied at each and every price that might prevail in the market
Supply Curve
Productivity will _____ if workers are unmotivated
Decrease
If producers expect _____ in the future, they may try to produce and sell as much as possible right away
Lower Prices
When more suppliers enter the market, the market supply will _____
Shift to the Right
_____ cost is the cost that a business incurs even if there are no employees and no production takes place
Fixed
The number of items sold multiplied by the average price of each item yields the _____ of a business
Total revenue
An increase in the cost of inputs can cause the supply curve to shift to the _____
Left
The introduction of technology usually shifts the supply curve to the _____
Right
_____ cost is the extra cost incurred when a business produces one more unit of a product
Marginal Cost
The four important measures of cost are: _____
Total Cost, Fixed Cost, Variable Cost, and Marginal Cost
The following can change the market supply curve: the cost of _____, the expectation that prices are about to _____, and the numbers of _____ offering the product
Labor; Increase; Sellers
The supply of a product normally decreases if taxes on the product _____
Increases
When employees are getting in each other’s way, the firm is operating in _____ of production
Stage III
Total cost is the sum of the _____ and _____ costs
Fixed; Variable
The level of profit-maximizing output is reached when _____ is equal to _____
Marginal Cost; Marginal Revenue
When producers offer fewer products for sale at each and every price, the supply curve has shifted to the _____
Left
The theory of production deals with the relationship between the _____ and the output of goods and services
Factors of Production
Rent payments and property taxes would be counted as _____
Fixed Costs
Many businesses are engaging in e-commerce because _____ costs are minimal
Fixed
_____ will be maximized when marginal revenue equals marginal cost
Profits
The _____ is a period of production in which producers can adjust the quantities of their resources, including capital
Long Run
The Law of Variable Proportions states that in the _____, output will change as one input is varied while others are held constant
Short Run
The three stages of production are: increasing returns, _____, and negative returns
Diminishing Returns
A production function describes the relationship between changes in output to different amounts of a single input while other inputs are held _____
Constant
The theory of production deals with the relationship between _____ and the output of goods and services
Factors of Production
Amount of a product that would be offered for sale at all possible prices is _____
Supply
Cost a business incurs even if nothing is produced is _____
Fixed Cost
Graph showing the various quantities supplied at each and every price is _____
Supply Curve
Cost that changes when the rate of operation or output changes is _____
Variable Cost
Number of units sold multiplied by the average price per unit is _____
Total Revenue
Amount of a product that producers bring to market at any given price is _____
Quantity Supplied
Unprocessed natural products used in production are _____
Raw Materials
Total product a firm must sell to cover its total costs is the _____
Break-Even Point
Government payment to encourage or protect an economic activity is a _____
Subsidy
Period of production that’s long enough for adjustments in all resources is the _____
Long Run
On supply curve SS shown on the graph, how does the quantity supplied change when the price increases for $1 to $2? What does this tell you about the elasticity of the supply curve? Explain.
Doubling the price from $1 to $2 causes the quantity supplied to triple from 2 to 6. Because a change in price results in a more-than-proportional change in quantity supplied, the supply curve is elastic
