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Vocabulary Chapter 5 Supply
Definitions on the Law of Supply
41
Economics
12th Grade
11/28/2012

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Term
Supply
Definition
Amount of product offered at each price
Term
Law of Supply
Definition
The principle that suppliers will normally offer more for sale at high prices and less at lower prices.
Term
Supply Schedule
Definition
A listing of the various quantities of a particular product supplied at all possible prices in the market.
Term
Market Supply Curve
Definition
The supply curve that shows the quantities offered at various prices by all firms tha offer the product for sale in a given market.
Term
Quantity Supplied
Definition
The amount that producers bring to market at any given price.
Term
Chage in Quantity Supplied
Definition
The change in amount offered for sale in response to a change in price.
Term
Change in Supply
Definition
A situation where suppliers offer different amounts of products for sale at all possible prices in the market.
Term
Subsidy
Definition
A goverment payment to an individual, business, or other group to encourage or protect a certain type of economic activity.
Term
Supply Elasticity
Definition
A measure of the way in which quantity supplied responds to a change in price.
Term
Theory of Production
Definition
Deals with the relationship between the factors of production and the output of goods and servicesl.
Term
Short Run
Definition
A period of production that allows producers to change only the amount of the variable input called labor.
Term
Long Run
Definition
A period of production long enough for producers to adjust the quantites of all their resources, including capital.
Term
Law of Variable Proportions
Definition
States that, in the short run, output will cahnge as input is varied while the others are held constant.
Term
Production Function
Definition
A concept that describes the relationship between changes in output to different amounts of a single input while other inputs are held constant.
Term
Raw Materials
Definition
Unprocessed natural products used in production.
Term
Total Product
Definition
Total output produced by the firm.
Term
Marginal Product
Definition
The extra output or change in total product caused by the addiction of one more unit of variable input.
Term
Stages of Production
Definition
Increasing returns, diminishing returns,-that are based on the way marginal product changes as the variable input of labor is changed,
Term
Diminishing Returns
Definition
The stage where output increases at a diminishing rate as more units of a variable input are added.
Term
Fixed Cost
Definition
The cost that a business incurs even if the plant is idle and ourput is zero.
Term
Overhead
Definition
 Fixed cost
Term
Variable Cost
Definition
Cost that changes when the business rate of operation or output changes.
Term
Total Cost
Definition
The sum of the fixed and variable costs.
Term
Marginal Cost
Definition
The extra cost incurred when a business produces one additional unit of a product.
Term
E-commerce
Definition
Eletronic business or exchange conducted over the Internet-does not need to spend large sums of money to rent a building and stock it with inventory.
Term
Total Revenue
Definition
The number of units sold multiplied by average price per unit.
Term
Marginal Revenue
Definition
The extra revenue associated with the production and sale of one additional unit of output.
Term
Marginal Analysis
Definition
A type of const-benefit decision making that compares the extra benefits to the extra costs of an action.
Term
Break-even Point
Definition
The total output or total product that business needs to sell in order to cover its total costs.
Term
Profit-maximizing Quantity of Output
Definition
Reached when marginal cost and marginal revenue are equal.
Term
Supply curve is always ______ sloping.
Definition
Upward
Term
Eight (8) causes of change in supply.
Definition

1) Cost of Input

2)Productivity

3)Technology

4)Taxes

5)Subsidies

6)Expectations

7)Government Regulations

8)Number of Sellers

Term
Supply goes up, supply curve goes _____.
Definition
right
Term
Supply goes down, supply curve goes ______.
Definition
Left
Term
Supply elasticity depends on the ______ of production.
Definition
Nature
Term
When looking at the elasticity of supply, you always look at the ______.
Definition
Short Run
Term
Stage I of Production is known as...
Definition
Increasing Returns
Term
Stage II of Production is known as...
Definition
Diminishing Returns
Term
Stage III of Production is known as...
Definition
Negative Returns
Term
A business will always operate in...
Definition
Stage II of Production (Diminishing Returns)
Term
When marginal cost and marginal revenue are ______, that's where you should operate.
Definition
Equal
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