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Econ 5 & 6
Econ 5
| Question | Answer |
|---|---|
| law of supply | producers offer more of a good as its price increases and less as its price falls |
| supply | the amount of goods available |
| quantity supplied | the amount that a supplier is willing and able to supply at a specific price |
| certris paribus | all other things held constant |
| supply schedule | chart that lists how much of a good a supplier will offer at various prices |
| variable | factor that can change |
| market supply schedule | chart that list how much of a good all suppliers will offer at various prices |
| supply curve | A graph of the quantity supplied of a good at various prices |
| elasticity of supply | a measure of the way quantity supplied reacts to a change in price |
| marginal product of labor | change in output from hiring one additional unit of labor |
| increasing marginal returns | level of production in which the marginal product of labor increases as the number of workers increases |
| diminishing marginal returns | level of production at which the marginal product of labor decreases as the number of workers increases |
| fixed costs | cost that does not change, no matter how much of a good is produced |
| variable cost | cost that rises or falls depending on the quantity produced |
| total cost | sum of fixed costs plus variable costs |
| marginal cost | cost of producing one more unit of a good |
| marginal revenue | additional income from selling one more unit of a good; sometimes equal to price |
| average cost | total cost divided by the quantity produced |
| operating cost | cost of operating a facility, such as a factory or a store |
| subsidy | A government payment that supports a business or market |
| excise tax | The government tax on the production or sale of a good that will affect the supply of that good |
| regualtion | government intervention in a market that affects the production of a good |
| How is total cost of a factory determined? | Adding fixed costs plus variable costs together |
| How is profit determined? | Subtracting total cost from total revenue |
| In what situation would a factory that is losing money keep operating? | It total revenue is greater than operating cost |
| How does specialization affect production? | It makes workers more effecient. |
| Analyzing future price expectations | If a farmer knows that the price of a crop will rise, he will store the goods now in order to sell the crop at a higher cost in the future |
| Transportation Costs | Cost of transporting a finished good to the consumer |
| Why is labor a variable cost? | Because it changes with the number of workers. |
| Capital | Any human-made resource used to produce other goods. Exam. sewing machine, scissors |
| Market Supply Curve | A graph of the quantity supplied of a good by all suppliers at various prices |
| What encourages a producer to make more of a good? | The promise of higher (profit) |
| Profit | The total revenue minus the total cost |
Created by:
sudokken
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