# Chapter 5 Econ Words

### 21 terms by Stephloveslove

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### supply

the amount of goods available. (Affected by the demand. supply of food is always high.)

### law of supply

tendency of suppliers to offer more of a good at a higher price. (If prices increase, so does quanitity and vice versa. If the demand for technologies increases, so will the amount and price.)

### quanitity supplied

the amount a supplier is willing and able to supply at a certain price. (Sometimes firms can't keep up with the demand because of limited factors.)

### supply schedule

a chart that lists how much of a good a supplier will offer at different prices. (know the chart.)

### variable

a factor than can change. (price of pizza, and the number of pizza suplied.)

### market supply schedule

a chart that lists how much of a good all suppliers will offer at different prices (same chart as supply schedule, just higher numbers.)

### supply curve

a graph of the quantity supplied of a good at different prices. (know the graph.)

### market supply curve

a graph of the quantity supplied of a good by all suppliers at different prices (same graph, higher numbers.)

### elasticity of supply

a measure of the way quantity supplied reacts to a change in price.

### marginal produce of labor

the change in output from hiring one additional unit of labor. (1 person can make 4 bags per hour, a second person raises it goes to 10. The marginal product is 6.)

### increasing marginal returns

a level of production in which the marginal product of labor increases as the number of workers increases. (More workers equals more output.)

### diminishing marginal returns

a level of production in which the marginal product of labor decreases as the number of workers increases. (If there are a limited number of machines, the business will experience this.)

### fixed cost

a cost that does not change, no matter how much of a good is produced. ( Revolve around production of facility; rent, property taxes.)

### variable cost

a cost that rises or falls depending on how much is produced. (to produce more beanbags, a company must hire more workers and buy more beans. Cost of labor, electricity, heat.)

### total cost

fixed costs plus variable costs. (Could include property taxes and heat cost.)

### marginal cost

the cost of producing one more unit of a good. (If a firm produces only one bean bag, then it still has the fixed cost. This can decrease the firms profit.)

### marginal revenue

the addition income from selling one more unit of a good; sometimes equal to the price.(The point where marginal cost and revenue meet is the best level of output. Know curve.)

### operating cost

the cost of operating a facility, such as a store or factory. (Variable costs.)

### subsidy

a government payment that supports a business or market. (Government pays certain industries to underproduce to keep prices low.)

### excise tax

a tax on the production or sale of a good. (increases production costs by adding an extra cost, used to discourage sale of goods that could harm the good, like alcohol or cigarettes.)

### regulation

government intervention in a market that affects the production of a good. (the government does this to cars to prevent air pollution.)

Example: