Coach Camp: Economics Chapter 5 Supply Test – Flashcards
Unlock all answers in this set
Unlock answersquestion
Supply
answer
the amount of a product that would be offered for sale at all possible prices that could prevail in the market
question
Law of Supply
answer
the principle that suppliers will normally offer more for sale at high prices and less at lower prices
question
individual supply curve
answer
illustrates how the quantity that a producer will make varies depending on the price that will prevail in the market
question
market supply curve
answer
illustrates the quantities and prices that all producers will offer in the market for any given product or service
question
change in quantity supplied
answer
the change in amount offered for sale in response to a change in price
question
change in supply
answer
is when suppliers offer different amounts of products for sale at all possible prices in the market
question
theory of production
answer
deals with the relationship between the factors of production and the output of goods and services
question
short run
answer
a period of production that allows producers to change only the amount of the variable input called labor
question
long run
answer
a period of production long enough for producers to adjust the quantities of all their resources, including capital
question
Law of variable proportions
answer
looks at how the final product is affected as more units of one variable input or resource are added to a fixed amount of other resources
question
total product
answer
the total output the company produces: a production schedule shows that, as more workers are added, total product rises until a point that adding more workers causes a decline in total product
question
marginal product
answer
the extra output or change in total product caused by adding one more unit of variable input
question
diminishing returns
answer
total production keeps growing but the rate of increase is smaller; each worker is still making a positive contribution to total output, but it is diminishing
question
fixed costs
answer
those that a business has even if it has no output. These include management salaries, rent, taxes, and depreciation on capital goods
question
variable costs
answer
those that change when the rate of operation or production changes, including hourly labor, raw materials, freight charges, and electricity
question
total costs
answer
the sum of all fixed costs and all variable costs
question
marginal costs
answer
the extra (variable) costs incurred when a business produces one additional unit of a product
question
total revenue
answer
the number of units sold multiplied by the average price per unit
question
marginal revenue
answer
the extra revenue connected with producing and selling an additional unit of output
question
marginal analysis
answer
comparing the extra benefits to the extra costs of a particular decision
question
break-even point
answer
the total output or total product the business needs to sell in order to cover its total costs
question
profit-maximizing quantity
answer
reached when marginal cost and marginal revenue are equal
