Vocab

Question 1

SUPPLY

Answer 1

What producers are willing and able to offer at various prices during a given time

Question 2

LAW OF SUPPLY

Answer 2

When a price increases the supply increases (vice versa) its directly realated

Question 3

SUPPLY CURVE

Answer 3

How much of a good suppliers are willing and able to supply at different prices

Question 4

ELASTICITY OF SUPPLY

Answer 4

Percent change in quantity supplied ÷ by the percent change in price

Question 5

MOVEMENT ALONG A SUPPLY CURVE

Answer 5

Change in quantity supplied resulting from a change in the price of a good.

Question 6

SHIFT OF SUPPLY CURVE

Answer 6

Increase or decrease in Supply because of anything except for the price of the good.

Question 7

SHORT RUN

Answer 7

Time period in which a resource is fixed

Question 8

LONG RUN

Answer 8

Period During which all of the firm’s resources can be varied/ changeable

Question 9

TOTAL PRODUCT

Answer 9

Total output of the firm per period.

Question 10

MARGINAL PRODUCT

Answer 10

Change in total product resulting from one unit change in a particular resource

Question 11

LAW OF DIMINISHING RETURNS

Answer 11

The more a resource is added marginal product eventually declines and become negative

Question 12

FIXED COST

Answer 12

Production cost that is independent from the firm’s output

Question 13

VARIABLE COST

Answer 13

Production cost that changes as output changes

Question 14

TOTAL COST

Answer 14

Sum of fixed cost and variable cost

Question 15

MARGINAL COST

Answer 15

Change in total cost ÷ by the change in output

Question 16

MARGINAL REVENUE

Answer 16

Change in total revenue from selling another unit of good

Question 17

ECONOMICS OF SCALE

Answer 17

Forces that reduce a firm’s average cost as the firm’s size or scale increases in the future