Econ 5 Flashcards
Amount of a product a producer or seller would be willing to offer for sale at all possible prices in market at given point in time
Supply
principle that more will be offered for sale at higher prices than at lower prices.
Law of supply
graphic portrayal showing how a change in the amount of a single variable input affects total output.
Production Function
extra output due to the addition of one more unit of input.
Marginal Product
stage of production where output increases at a decreasing rate as more units of variable input are added.
Diminishing Returns
costs of production that do not change when output changes.
Fixed Costs
production cost that varies as output changes; labor, energy, raw materials.
Variable costs
production level where total cost equals total revenue; production needed if the firm is to recover its costs.
Break-Even Point
a combination of quantities that someone would be willing and able to buy over a rango of possible prices at a given moment.
Demand
rule stating that more will be demanded at lower prices land less at higher prices; an inverse relationship between price and quantity demanded.
Law of Demand
additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a product
Marginal Utility
competing products that can be used in place of one another; products related in such a way that an increase inethe price of one increases the demand for the other.
Substitutes
type of elasticity in which a ghange in the independent variable (usually price) results in a larger change in the dependent variable (usually quantity demanded or supplied).
Elastic
the case of demand elasticity where the percentage change in the independent variable (usually price) causes a less than proportionate change in the dependent variable (usually quantity demanded or supplied).
Inelastic
elasticity where a change in the independent variable (usually price) generates a proportional change of the dependent variable (quantity demanded or supplied).
Unit Elastic
