Economics Vocab

28 terms by katharris29 

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Supply

a schedule of quantities that would be offered for sale at all possible prices that could prevail in the market

Supply Schedule

the quantities offered at each and every possible market

Supply Curve

slopes upward and to the right to reflect the tendency of suppliers to offer greater quantities for sale at higher prices

Law of Supply

the quantity supplied, or offered for sale, varies directly wit hits price

Quantity Supplied

the amount that producers bring to market at any one price

Change in Quantity Supplied

the change in amount offered for sale in response to a change in price

Change in Supply

producers offer different amounts of products for sale at all possible prices in the market

Subsidies

government payments to individuals, business, or other groups to encourage or protect a certain type of economic activity

Theory of Production

deals with the relationship between the factors of production and the output of goods and services

Short Run

a period of production that allows producers to change only the amount of variable inputs-usually assumed to be labor

Long Run

a period of production long enough for all inputs, including capital, to vary

Law of Variable Proportions

that in the short run, output will change as one input is varied while the others are held constant

Production Function

concept that relates to changes in output to different amounts of a single input while other inputs are constant

Total Product

total output produced by the firm

Marginal Product

the extra output generated by adding one more unit of variable input

Stages of Production

increasing returns, diminishing returns and negative returns- that are based on the way marginal product changes as variable inputs are added

Diminishing Returns

as more units of a certain variable input are added to a constant amount of other resources, total output keeps rising, but only at a diminishing rates

Fixed Cost

the cost that a business incurs even if the plant is idle and output is zero

Overhead

total fixed cost

Deprecation

gradual wear and tear on capital goods over time and through use

Variable Cost

a cost that does change when the business rate of operation or output changes

Total Cost

production is the sum of the fixed and variable cost

Marginal Cost

extra cost incurred when a business produces one additional unit of a product

Total Revenue

the number of units sold multiplied by the average price per unit

Marginal Revenue

the extra revenue associated with the production and sale of one additional unit of output

Marginal Analysis

type of decision making that compares the extra benefits to the extra cost of an action

Break-Even Point

the total output or total product the business needs to sell in order to cover its total cost

Profit-Maximizing Quantity of Output

reached when marginal cost and marginal revenue is equal

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