Module 3 - Supply Flashcards
___ is a principle that states: as the price of a G, S, or R rises, the quantity supplied will increase and vice versa (if all else remains constant).
Law of Supply
___ states that if at least one input of production is fixed, the marginal productivity of additional variable resources will eventually decrease (if all else remains constant)
Diminishing marginal productivity
___ is a table representation of the relationship between the price of a G, S, or R and the quantities producers are willing and able to supply over a fixed period of time (if all else remains constant).
Supply schedule
___ is a graph representation of the relationship between the price of a G, S, or R and the quantities producers are willing and able to supply over a fixed period of time (if all else remains constant).
Supply curve
___ is the quantity of a G, S, or R that producers are willing and able to supply at a given price.
Quantity supplied
↑ price ↑ quantity supplied
↓ price ↓ quantity supplied
What law in part explains the explanation behind the Law of Supply?
Law of Increasing Opportunity Cost
If all else is held constant, firms will be willing and able to produce more output only when prices rise, precisely because their opportunity cost of production is increasing.
___ is the summation of the individual supply curves.
Market supply
___ is a change in the quantity of G, S, or R supplied at every price.
Shift in supply
↑ supply - R shift
↓ supply - L shift
___ is the change in quantity of G, S, or R supplied due to the change in price.
Movement along a (existing) supply curve
A change in ___ shifts the supply curve L or R.
Non-price determinants
(Supply non-price determinants: Tax, subsidies, resources, technology, number of sellers and expectations of future prices)
___ is a payment made by the government to a business; does not necessarily require economic acitivity.
Subsidy
___ is a payment made by a business or individual to the government; the result of economic activity.
Tax
↑ subsidy ___ [↑or↓] supply
↑
↓ subsidy ___ [↑or↓] supply
↓
↑ tax ___ [↑or↓] supply
↓
↓ tax ___ [↑or↓] supply
↑
Taxes and subsidies placed on consumers shift ___ curves.
Demand
Taxes and subsidies placed on businesses shift ___ curves.
Supply
___ focuses on price (if all else remains constant).
Supply
___ focuses on what is changing - price or non-price determinants.
Quantity supplied
↑ price ___ [↑or↓] quantity supplied
↑
More money to produce G, S, R
↑ non-price determinants ___ [↑or↓] supply
↑
I.e., fertilizers
___ are inputs used to produce G and S.
I.e., land, labor, capital, and entrepreneurial ability
Resources
___ is the knowledge, inventions and innovations that can potentially increase resource productivity.
I.e., electronic radiographs and MRIs provide 24/7 diagnostics
Technology
↑ resource costs ___ [↑or↓] supply
↓ - L shift
↓ resource costs ___ [↑or↓] supply
↑ - R shift
(+) technological changes ___ [↑or↓] supply and productivity
↑
(-) technological changes ___ [↑or↓] supply and productivity
↓
___ are market participants who are willing and able to sell G, S, and R.
Sellers
___ are the anticipated future outcomes, including prices, that sellers associate with the production of a G, S or R.
Seller expectations
___ refers to the quantity of output firms produce.
Production
___ refers to the quantity of output firms are willing and able to provide to the market at different prices (if all else remains constant).
Supply
↑ expected prices will ↑ production and ___ [↑or↓] current supply to markets.
↓
Decrease in products available to current markets due to the holding of products for future market sales
What are the non-price determinants of supply?
- Tax
- Subsidies
- Resources
- Technology
- Number of sellers
- Expectations of future prices
___ is the point on a supply curve at the same price (as quantity demanded).
Quantity supplied
