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Economics Chapter 5 Supply _ test review Essay

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supply
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the desire and ability to produce and sell a product
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law of supply
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states that when prices decrease, quantity supplied decreases, and when prices increase, quantity supplied increases (when the price goes down so does the amount made; when the price goes up so does the amount made)
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supply schedule
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lists how much of a good or service an individual producer is willing and able to offer for sale at each price
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market supply schedule
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lists how much of a good or service all producers in a market are willing and able to offer for sale at each price
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supply curve
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shows the data from a supply schedule in a graph form
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market supply curve
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shows the data from a market supply schedule in a graph form
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marginal product
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the change in total output brought about by adding one more worker
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specialization
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having a worker focus on a particular aspect of production
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increasing returns
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occur when hiring new worker causes marginal product to increase
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diminishing returns
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occur when hiring a new worker causes marginal product to decrease
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fixed cost
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those that business owners incur no matter how much they produce
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variable cost
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cost that depend on the level of production output (how much product is made)
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total cost
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the sum of fixed and variable costs
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marginal cost
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the extra cost of producing one more unit
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marginal revenue
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the money made from the sale of each additional unit of output (each additional product made)
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total revenue
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a company’s income from selling products
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profit-maximizing output
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the level of production at which a business realizes the greatest amount of profit
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change in quantity supplied
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a rise or fall in the amount producers offer for sale because of a change in price
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change in supply
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occurs when a change in the marketplace prompts producers to sell different amounts at every price
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input costs
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the price of the resources used to make a product
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labor productivity
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the amount of goods and services that a person can produce in a given time
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technology
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entails applying scientific methods and innovations to production
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excise tax
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a tax on the making or selling of certain goods or services
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regulation
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a set of rules or laws designed to control business behavior
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elasticity of supply
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a measure of how responsive producers are to price changes in the marketplace