Econ. Ch. 5 Flashcards
Law of Supply
tendency of suppliers to offer more of a good at a higher price
Elasticity of supply
a measure of the way quantity supplied reacts to a change in price
Supply curve
a graph of the quantity supplied of a good at different prices
Shifts of supply
a situation where suppliers offer different amounts of products for sale at all possible prices in the market
Factors that shift supply
Cost of resources that change. New technologies.
Fixed costs
a cost that does not change, no matter how much of a good is produced
Variable costs
a cost that rises or falls depending on how much is produced
Marginal costs
the cost of producing one more unit of a good
Input costs
the cost of overhead items such as labor and materials used in the production of goods and services.
Government influence on supply
price floor and price ceiling. Changing tax rate, interest rate, money supply, spending. These are ways that gov. influences supply.
Subsides
a government payment that supports a business or market
Taxes
a negative income tax is a progressive income tax system where people earning below a certain amount.
Regulatons
government intervention in a market that affects the production of a good
Excise Tax
a tax on the production or sale of a good
Marginal reveue
the additional income from selling one more unit of a good; sometimes equal to price
