Econ CH 5 Flashcards
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.
Supply
principle that more will be offered for sale at higher prices than at lower prices.
Law of Supply
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.
Supply schedule
a graph that shows the quantities supplied at each and every possible price in the
market.
Supply Curve
specific amount offered for sale at a given price; point on the supply curve.
Quantity Supplied
different amongst offered for sale at each and every possible price in the
market; shift of the supply curve.
Change in Supply
responsiveness of quantity supplied to a change in price.
Supply Elasticity:
graphic portrayal showing how a change in the amount of a single variable
input affects total output.
Production function
production period so short that only variable inputs (usually labor) can be changed.
Short Run
production period long enough to change the amount of variable and fixed inputs used
in production.
Long Run
total output or production by a firm.
Total product
extra output due to the addition of one more unit of input.
Marginal Product
phases of production that consist of increasing, decreasing, and negative
returns.
Stages of Production
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
broad category of fixed costs that includes interest, rent, taxes, and executive salaries.
Overhead
production cost that varies as output changes; labor, energy, raw materials.
Variable Cost
extra cost of producing one additional unit of production.
Marginal Cost
level of production where marginal cost is equal to
marginal revenue.
Profit-Maximizing Quantity of Output:
production level where total cost equals total revenue; production needed if the
firm is to recover its costs.
Break-Even Point
Total amount earned by a firm from the sale of its products; average price of a good sold times the quantity sold.
Total Revenue
