Chapter 8: Supply Flashcards
Supply
The willingness and ability to sell a product
Market supply
Total supply of a product
Extension in supply
A rise in the quantity supplied caused by a rise in the price of the product itself
Contraction in supply
A fall in the quantity supplied caused by a fall in the price of the product itself
Change in supply
Changes in supply condition causing shifts in the supply curve
Increase in supply
A rise in supply at any given price, causing the supply curve to shift to the right
Decrease in supply
A fall in supply at any given price, causing the supply curve to shift to the left
Unit cost
The average cost of production. It is found by dividing total cost by output
Improvements in Technology
Advances in the quality of capital goods and methods of production
Direct taxes
Taxes on the income and wealth of individuals and firms (e.g. income tax)
Indirect taxes
Taxes on goods and services (e.g. sales tax)
Tax
A payment to the government
Subsidy
A payment by the government to encourage the production or consumption of a product
