Chapter 5: Supply Flashcards
the desire and ability to produce and sell a product
supply
when prices decrease, quantity supplied decreases; when prices increase, quantity supplied increases
law of supply
lists how much of a good or service an individual producer is willing/able to offer for sale at each price
left side: price
right side: quantity supplied
supply schedule
same as a supply schedule, but for all; not just for an individual
market supply schedule
shows the data from a supply schedule in graph form
y-axis: price
x-axis: quantity supplied
slopes upward
supply curve
shows data from a market supply schedule in graph form
market supply curve
the change in total output brought about by adding one more worker
marginal product
having a worker focus on a particular aspect of production
specialization
occur when hiring new workers causes marginal product to increase
increasing returns
occur when hiring new workers causes marginal product to decrease
diminishing returns
those that business owners incur no matter how much they produce
fixed cost
depend on the level of production output (change)
variable cost
the sum of fixed and variable costs
total cost
the extra cost of producing one more unit
marginal cost
the money made from the sale of each additional unit of output
marginal revenue (price)
a company’s income from selling its products
total revenue
the level of production at which a business realizes the greatest amount of product
profit maximizing output
a rise or fall in the amount producers offer for sale because of change in price
change in quantity supplied
occurs when a change in the market place prompts producers to sell different amounts at every price
change in supply
the price of the resources used to make products
input costs
the amount of goods and services that a person can produce in a given time
labor productivity
entails applying scientific methods and innovations to production
technology
a tax on the making or selling of certain goods or services
excise tax
a set of rules or laws designed to control business behavior
regulation
a measure of how responsive producers are to price changes in the marketplace
elasticity of supply
relation between labor/marginal product
marginal product schedule
output decreases through crowding, disorganization
negative returns
price x quantity purchased at that price
total revenue
comparison of costs/workers/etc.
marginal analysis
what are the 6 factors of supply?
- input costs
- labor productivity
- technology
- government action
- producer expectations
- number of producers
price change = larger changer in quantity supplied
elastic
price change = smaller change in quantity supplied
inelastic
price and quantity supplied change by same percentage
unit elastic
what is the main factor that determines elasticity?
the ease of changing production
