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Econ Chapter 5
| Question | Answer |
|---|---|
| the sum of all the supply in the economy | aggregate supply |
| states that producers are willing to sell more of a good or service at a higher price than they are at a lower price | law of supply |
| A ______________ lists how much of a good or service an individual producer is willing and able to offer for sale at each price. | supply schedule |
| how much of a good or service all producers in a market are willing and able to offer for sale at each price | market supply schedule |
| A ____________ shows the data from a supply schedule in graph form. | supply curve |
| a graph that shows data from a market supply schedule | market supply curve |
| the change in total output that results from adding one more worker | marginal product |
| a situation that occurs when individuals or businesses concentrate their efforts in the areas in which they have an advantage for increased productivity and profit | specialization |
| a situation in which hiring new workers cause marginal product to increase | increasing returns |
| a situation in which new workers cause marginal product to grow but at a decreasing rate | diminishing returns |
| expenses that business owners incur no matter how much they produce | fixed costs |
| business costs that vary with the level of production output | variable costs |
| the sum of fixed and variable costs | total cost |
| the additional cost of producing or using one more unit of a good or service | marginal cost |
| the money made from each additional unit sold | marginal revenue |
| the income a business receives from selling its products | total revenue |
| the point in production at which a business has reached its highest level of profit | profit-maximizing output |
| an increase or decrease in the amount of a good or service that producers are willing to sell because of a change in price | change in quantity supplied |
| a situation in which a change in the marketplace prompts producers to offer different amounts for sale at every price | change in supply |
| the price of the resources needed to produce a good or service | input costs |
| the amount of goods and services a person can produce in a given time | labor productivity |
| the application of scientific methods and innovations to production | technology |
| a tax on the production or sale of a specific good or service | excise tax |
| _________ is a set of rules or laws designed to control business behavior. | Regulation |
| the reduction or elimination of government oversight and control of business | deregulation |
| a measure of how responsive producers are to price changes in the marketplace | elasticity of supply |
| Supply is defined as | the willingness and ability of producers to offer goods and services for sale |
| According to the law of supply, when prices increases, | quantity supplied increases |
| According to the law of supply, when prices decrease | quantity supplied decreases |
| Economists use a supply curve to | show the law of supply in graph form |
| The appearance of a supply curve is | an upward slope, bottom left to top right |
| A supply schedule is related to a supply curve because | the supply curve shows the data from the supply schedule in graphic form |
| An ice cream shop surveyed its customers about how many scoops they would buy at different prices. The owner wants to put the information in a format that will visually show the overall pattern. What should she do? | Draw a market supply curve. |
| The change in total output that results from hiring one additional worker is called | marginal product |
| What does a marginal product schedule show? | the relationship between labor and marginal product |
| The additional expense of producing one more unit of a product is called | marginal cost |
| The difference between fixed costs and variable costs is that | fixed costs remain the same; variable costs depend on how much is produced |
| Total cost is the sum of | fixed costs and variable costs |
| Business owners decide on the right number of workers by analyzing data to learn when | profit-maximizing output is reached |
| Marginal revenue equals | product price |
| Profit-maximizing output is the point at which | marginal revenue and marginal cost are equal |
| A business that discovers a decline in profit can best solve the problem by | creating a production costs and revenues schedule to find the profit-maximizing output |
| The amount of goods and services that a person can produce in a given time is called | labor productivity |
| Car manufacturers who use robots to do certain jobs on the assembly line are trying to increase supply by | applying new technology |
| The government uses excise taxes to | decrease the supply of products it doesn't want people to use |
| Excise taxes reduce supply by | increasing producers' costs and discouraging production |
| An automobile manufacturer learns that a foreign country is about to tax all the rubber it exports, thus raising prices. What is the carmaker most likely to do? | plan to produce slightly fewer cars after the price of rubber goes up |
| Manju opens the first Indian restaurant in her city, and it is a success. How will her success most likely affect the number of producers? | Two more Indian restaurants will open, but because of the limited number of customers, one will eventually fail. |
| The ease of changing production to respond to price change determines | how elastic a supply is |
| What is supply said to be if a change in price leads to a relatively smaller change in quantity supplied? | inelastic |
| What increases the elasticity of supply for most goods and services? | time |
| Which types of industries tend to take a great deal of time to shift the resources of production to respond to price changes? | those that rely on large capital outlays |
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