Chapter 8: Supply Flashcards
Supply
The willingness and ability to sell a product.
Market supply
Total supply of a product
Individual supply
The supply of one plant/farm.
Supply and price
Directly related.
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 conditions causing shifts in the supply curve.
Increase in supply
A rise in supply at any given prise 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 left.
Causes of changes in supply
- Changes in the cost of production
- Improvements in technology
- Taxes
- Subsidies
- Weather conditions and health of livestock and crops
- Price of other products
- Disasters and wars
- Discoveries and depletions of commodities
Unit cost
The average cost of production. 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.
Indirect taxes
Taxes on goods and services.
Tax
A payment to the government.
