Chapter 5 Economics- Supply – Flashcards
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When they are motivated
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When does the productivity of workers rise?
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Supply as much as they can now
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What will producers do if they expect lower prices in the future?
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Increase
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What happens to the market supply when more suppliers enter the market?
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1.Increasing Returns- marginal output increases with each new worker. Companies are tempted to hire more workers. 2. Diminishing Returns- total production keeps growing but the rate of increase is smaller. 3. Negative Returns- marginal product becomes negative, decreasing total plant output.
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What are the 3 Stages of Production? Describe.
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Shifts left
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What will happen to the supply curve if there is an increase in the costs of inputs?
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When marginal cost is equal to marginal revenue
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When does profit-maximizing quantity of output occur?
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7 factors for change in supply
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What can change a market supply curve?
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Decrease them
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How will taxes affect the supply of a product?
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Shifts left
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What happens to the supply curve when producers offer fewer products for sale at each and every price?
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Fixed costs- Insurance Variable costs- Electricity, raw materials, utilities
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What would be considered some fixed costs? variable costs?
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Lower fixed costs
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Why do many businesses engage in e-commerce today?
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When marginal cost equals marginal revenue
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If we look at marginal revenue, when will profits be maximized?
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1. Cost of Inputs 2. Productivity 3. Technology 4. Number of Sellers 5. Takes & Subsidies 6. Expectations 7. Government Regulations
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7 factors/variables for change in supply?
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the willingness and ability of a producer to produce and sell a product
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Supply
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The amount of a good that sellers are willing and able to sell
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Quantity Supplied
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A chart that lists how much of a good a supplier will offer at different prices
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Supply Schedule
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a chart that lists how much of a good all suppliers will offer at various prices
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Market Supply Schedule
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A graph of the quantity supplied of a good at different prices
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Supply Curve
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a graph of the quantity supplied of a good by all suppliers at different prices
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Market Supply Curve
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A measure of the way quantity supplied reacts to a change in price
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Elasticity of Supply
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the change in total output that results from adding one more worker
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Marginal Product
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a situation in which a change in the marketplace prompts producers to offer different amounts for sale at every price
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Change in Supply
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states that producers are willing to sell more of a good or service at a higher price than they are at a lower price
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Law of Supply
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the income a business receives from selling its products
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Total Revenue
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expenses that business owners incur no matter how much they produce
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Fixed Costs
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the additional cost of producing or using one more unit of a good or service
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Marginal Cost
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a government payment that helps cover the cost of an economic activity that can benefit the public as a whole
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Subsidy
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a situation in which total costs and total revenues are the same
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Break-Even Point
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business costs that vary with the level of production output
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Variable Costs
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the money made from each additional unit sold
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Marginal Revenue
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a situation in which new workers cause marginal product to grow but at a decreasing rate
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Diminishing Returns
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the sum of fixed and variable costs
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Total Cost
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an effort to explain the principles by which a business firm decides how much of each commodity that it sells (its "outputs" or "products") it will produce
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Theory of Production
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Natural Resources
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Raw Materials
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production period so short that only the variable inputs (usually labor) can be changed
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Short Run
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production period long enough to change the amounts of all inputs
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Long Run
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total output or production by a firm
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Total Product
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broad category of fixed costs that includes rent, taxes, and executive salaries
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Overhead
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looks at how the final product is affected as more units of one variable input or resources are added to a fixed amount of other resources
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Law of Variable Proportions
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a graph showing how to change in the amount of a single variable input changes total output
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Production Function
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comparing the extra benefits to the extra costs of a particular decision
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Marginal Analysis
