28 terms

Chapter 5 vocab economics

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supply
amount of a product a producer or seller would be willing to offer for sale at all possible prices in a market at a given point in time
Law of Supply
principle that more will be offered for sale at higher prices than at lower prices
supply schedule
A table showing the quantities that would be produced or offered for sale at each and every possible price in the market a given point in time
Supply curve
A graph that shows the quantities supplied at each and every possible price in the market t
Market supply curve
the supply curve that shows the quantities offered at various prices by all firms that offer the product for sale in a given market
quantity supplied
specific amount offered for sale at a given price; point on the supply curve
change in quantity supplied
the change in amount offered for sale in response to a change in price
Change in supply
different amounts offered for sale at each and every possible price in the market; shift of the supply curve
Subsidy
government payment to encourage or protect a certain economic activity
supply elasticity
Responsiveness of quantity supplied to a change in price
Production function
graphic portrayal showing how a change in the amount of a single variable input affects total output
short run
production period so short that only variable inputs (usually labor) can be changed
long run
production period long enough to change amount of variable and fixed inputs used in production
total product
total output or production by a firm
Marginal product
extra output due to the addition of one more unit of input
stages of production
phases of production that consist of increasing, decreasing, and negative returns
Diminishing returns
stage of production where output increases at a decreasing rate as more units of variable input are added
Fixed costs
costs of production that do not change when output changes
Overhead
broad category of fixed costs that includes interest, rent, taxes, and executive salaries
Variable cost
production cost that varies as output changes; labor, energy, raw materials
Total cost
the sum of fixed costs plus variable costs
Marginal cost
Extra cost of producing one additional unit of production.
Average revenue
average price that every unit of output sells for
Total revenue
total amount earned by a firm from the sale of its products
Marginal revenue
extra revenue from the sale of one additional unit of output
profit-maximizing quantity of output
level of production where marginal cost is equal to marginal revenue
Break even point
production level where total cost equals total revenue
E commerce
electronic business or exchange conducted over the internet