Chp. 5 Flashcards
What is Supply?
Amount of a product a producer or seller would be willing to offer for sale at all possible prices in a market at a given point in time.
What is the Law of Supply?
Principle that more will be offered for sale at higher prices than at lower prices.
What is a Supply Schedule?
A table showing the quantities that would be produced or offered for sale at each and every possible price in the market at a given point in time.
What is a Supply Curve?
A graph that shows the quantities supplied at each and every possible price in the market.
What is Quantity Supplied?
Specific amount offered for sale at a given price; point on the supply curve.
What is a Change in Supply?
Different amounts offered for sale at each and every possible price in the market; shift of the supply curve.
What is Supply Elasticity?
Responsiveness of quantity supplied to a change in price.
What is a Production Function?
Graphic portrayal showing how a change in the amount of a single variable input affects total output.
What is the Short Run?
Production period so short that only variable inputs (usually labor) can be changed.
What is the Long Run?
Production period long enough to change the amount of variable and fixed inputs used in production.
What is Total Product?
Total output or production by a firm.
What is Marginal Product?
Extra output due to the addition of one more unit of input.
What are the Stages of Production?
Phases of production that consist of increasing, decreasing, and negative returns.
What are Diminishing Returns?
Stage of production where output increases at a decreasing rate as more units of variable input are added.
What are Fixed Costs?
Costs of production that do not change when output changes.
Overhead
Broad category of fixed costs that includes interest, rent, taxes, and executive salaries.
What is Variable Cost?
Production cost that varies as output changes; labor, energy, raw materials.
What is Marginal Cost?
Extra cost of producing one additional unit of production.
Profit-Maximizing Quantity of Output
Level of production where marginal cost is equal to marginal revenue.
What is the Break-Even Point?
Production level where total cost equals total revenue; production needed if the firm is to recover its costs.
