Economics Ch. 5 Supply Vocab

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Supply
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amount of a product offered for sale at all possible prices in a market
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Supply Schedule
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a table showing the quantities produced or offered for sale at each and every possible price in the market
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Law of Supply
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principle that more will be offered for sale at high prices than at lower prices
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Quantity Supplied
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amount offered for sale at a given price; point on the supply curve
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Change in Quantity Supplied
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change in amount offered for sale in response to a price change; movement along the supply curve
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Change in Supply
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different amounts offered for sale at each and every possible price in the Market; shift of the supply curve
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Subsidy
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government payment to encourage or protect a certain economic activity
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Supply Elasticity
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responsiveness of quantity supplied to a change in price
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Short Run
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production period so short that only inputs (usually labor) can be changed
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Long Run
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production period long enough to change amount of variable and fixed inputs used in production
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Production Function
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graphic portrayal showing how a change in the amount of a single variable input affects total output
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Total Product
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total output or production by a firm
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Marginal Product
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extra output due to the addition of one more unit of input
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Stages of Production
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phases of production that consists of increasing, decreasing, and negative returns
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Diminishing Returns
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stages of production where output increases at a decreasing rate as more units of variable input are added
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Fixed Costs
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costs of production that do not change when output changes
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Overhead
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brood category of fixed costs that includes interest, rent, taxes, and executive salaries
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Depreciation
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gradual wear on capital goods
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Variable Cost
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production cost that varies as output changes; labor, energy, raw materials
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Total Cost
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variable plus fixed cost; all costs associated with production
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Marginal Cost
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extra cost of producing one additional unit of production
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Total Revenue
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total amount earned by a firm from the sale of its products; price of goods sold times quantity sold
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Marginal Revenue
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extra revenue from the sale of one additional unit of output
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Marginal Analysis
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decision making that compares the extra cost of doing something to the extra benefits gained

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