Chapter 5: Supply

Question 1

the desire and ability to produce and sell a product

Answer 1

supply

Question 2

when prices decrease, quantity supplied decreases; when prices increase, quantity supplied increases

Answer 2

law of supply

Question 3

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

Answer 3

supply schedule

Question 4

same as a supply schedule, but for all; not just for an individual

Answer 4

market supply schedule

Question 5

shows the data from a supply schedule in graph form
y-axis: price
x-axis: quantity supplied
slopes upward

Answer 5

supply curve

Question 6

shows data from a market supply schedule in graph form

Answer 6

market supply curve

Question 7

the change in total output brought about by adding one more worker

Answer 7

marginal product

Question 8

having a worker focus on a particular aspect of production

Answer 8

specialization

Question 9

occur when hiring new workers causes marginal product to increase

Answer 9

increasing returns

Question 10

occur when hiring new workers causes marginal product to decrease

Answer 10

diminishing returns

Question 11

those that business owners incur no matter how much they produce

Answer 11

fixed cost

Question 12

depend on the level of production output (change)

Answer 12

variable cost

Question 13

the sum of fixed and variable costs

Answer 13

total cost

Question 14

the extra cost of producing one more unit

Answer 14

marginal cost

Question 15

the money made from the sale of each additional unit of output

Answer 15

marginal revenue (price)

Question 16

a company’s income from selling its products

Answer 16

total revenue

Question 17

the level of production at which a business realizes the greatest amount of product

Answer 17

profit maximizing output

Question 18

a rise or fall in the amount producers offer for sale because of change in price

Answer 18

change in quantity supplied

Question 19

occurs when a change in the market place prompts producers to sell different amounts at every price

Answer 19

change in supply

Question 20

the price of the resources used to make products

Answer 20

input costs

Question 21

the amount of goods and services that a person can produce in a given time

Answer 21

labor productivity

Question 22

entails applying scientific methods and innovations to production

Answer 22

technology

Question 23

a tax on the making or selling of certain goods or services

Answer 23

excise tax

Question 24

a set of rules or laws designed to control business behavior

Answer 24

regulation

Question 25

a measure of how responsive producers are to price changes in the marketplace

Answer 25

elasticity of supply

Question 26

relation between labor/marginal product

Answer 26

marginal product schedule

Question 27

output decreases through crowding, disorganization

Answer 27

negative returns

Question 28

price x quantity purchased at that price

Answer 28

total revenue

Question 29

comparison of costs/workers/etc.

Answer 29

marginal analysis

Question 30

what are the 6 factors of supply?

Answer 30

1. input costs 2. labor productivity 3. technology 4. government action 5. producer expectations 6. number of producers

Question 31

price change = larger changer in quantity supplied

Answer 31

elastic

Question 32

price change = smaller change in quantity supplied

Answer 32

inelastic

Question 33

price and quantity supplied change by same percentage

Answer 33

unit elastic

Question 34

what is the main factor that determines elasticity?

Answer 34

the ease of changing production